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Wells Technical Institute (WTI)_Adjusting entries and Financial statements

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Question;Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2013, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of itemsathroughh that require adjusting entries on December 31, 2013, follow. Additional Information Items a.An analysis of WTI's insurance policies shows that $3,350 of coverage has expired.b.An inventory count shows that teaching supplies costing $3,750 are available at year-end 2013.c.Annual depreciation on the equipment is $15,100.d.Annual depreciation on the professional library is $9,100.e.On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $4,400, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2014.f.On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,900 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month, for example, October recognizes one-half month accrual.)g.WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $290 per day for each employee.h.The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTEUnadjusted Trial BalanceDecember 31, 2013 Debit Credit Cash$53,000 Accounts receivable 0 Teaching supplies 9,900 Prepaid insurance 13,900 Prepaid rent 4,900 Professional library 54,000 Accumulated depreciation?Professional library $11,900 Equipment 99,000 Accumulated depreciation?Equipment 16,900 Accounts payable 46,900 Salaries payable 0 Unearned training fees 22,000 Common stock 29,000 Retained earnings 99,000 Dividends 69,000 Tuition fees earned 146,700 Training fees earned 59,000 Depreciation expense?Professional library 0 Depreciation expense?Equipment 0 Salaries expense 69,000 Insurance expense 0 Rent expense 42,500 Teaching supplies expense 0 Advertising expense 7,900 Utilities expense 8,300 Totals $431,400 $431,400 2.value:10.00 points2.Prepare the necessary adjusting journal entries for items a through hPost the entries in T- AccountsPrepare Adjusted Trial BalancePrepare Income Statement, Statement of retained earnings, Balance Sheet

 

Paper#37273 | Written in 18-Jul-2015

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