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, 2016, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2016, follow. Additional Information Items An analysis of WTI's insurance policies shows that $2,807 of coverage has expired. An inventory count shows that teaching supplies costing $2,433 are available at year-end 2016. Annual depreciation on the equipment is $11,227. Annual depreciation on the professional library is $5,614. 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 $2,700, 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 2017. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $2,819 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.) WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2016 Debit Credit Cash $ 26,944 Accounts receivable 0 Teaching supplies 10,362 Prepaid insurance 15,545 Prepaid rent 2,073 Professional library 31,088 Accumulated depreciation—Professional library $ 9,328 Equipment 72,533 Accumulated depreciation—Equipment 16,582 Accounts payable 35,202 Salaries payable 0 Unearned training fees 13,500 Common stock 13,182 Retained earnings 52,726 Dividends 41,452 Tuition fees earned 105,701 Training fees earned 39,379 Depreciation expense—Professional library 0 Depreciation expense—Equipment 0 Salaries expense 49,743 Insurance expense 0 Rent expense 22,803 Teaching supplies expense 0 Advertising expense 7,254 Utilities expense 5,803 Totals $ 285,600 $ 285,600 rev: 07_12_2016_QC_CS-55458, 09_26_2016_QC_CS-63134 Prepare an adjusted trial balance.   

Answer 1

WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance			Adjustments		Adjusted
December 31, 2016
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$26,944				26944
Accounts receivable	0		7,048		7048
Teaching supplies	10,362			7,929	2,433
Prepaid insurance	15,545			2,807	12,738
Prepaid rent	2073			2,073	0
Professional library	31,088				31088
Accumulated depreciation—Professional library		9,328		5,614		14,942
Equipment	72,533				72533
Accumulated depreciation—Equipment		16,582		11,227		27,809
Accounts payable		35,202				35202
Salaries payable		0		400		400
Unearned training fees(13500*2/5)		13,500	5,400			8,100
Common stock		13,182				13182
Retained earnings		52,726				52726
Dividends	41,452				41452
Tuition fees earned		105,701		7,048		112,748.50
Training fees earned		39,379		5,400		44,779
Depreciation expense—Professional library	0		5,614		5614
Depreciation expense—Equipment	0		11,227		11227
Salaries expense	49,743		400		50,143
Insurance expense	0		2,807		2,807
Rent expense	22,803		2,073		24,876
Teaching supplies expense	0		7,929		7,929
Advertising expense	7,254				7,254
Utilities expense	5,803				5,803
Totals	285600	285600	42,498	42,498	309,889	309,889