Journal entry worksheet < 1 2 3 4 5 7 On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the cass. At December 31, $7,500 of the tuition revenue has been earned by WTI. Note: Enter debits before credits. Transaction General Journal Debit Credit f. Record entry Clear entry Vlew general journal
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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Problem 3-3A (Statle) Preparlng adjusting entrles, adjusted trlal balance, and financlal statements LO P1,
P2, P3, P4, P5
[The following information applies to the questions displayed below]
Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to Individuals who pay tuition directiy to
the school. WTI also offers training to groups in off-site locations. WTI Initially records prepald expenses and uneamed
revenues In balance sheet accounts. Its unadjusted trial balance as of December 31 follows, along with descriptions of
Items a through hthat require adjusting entries on December 31.
Addıtional Information
a. An analysis of WT's Insurance policles shows that $2,400 of coverage has explred.
b. An Inventory count shows that teaching supplies costing $2.800 are avallable at year-end.
C. Annual depreclation on the equlpment is $13,200.
d. Annual depreclation on the professional library is $7,200.
e. On September 1, WTI agreed to do five training courses for a client for $2,500 each. Two courses will start Immediately
and finish before the end of the year. Three courses will not begin until next year. The client pald $12,500 cash in
advance for all five training courses on September 1, and WTI credited Unearned Revenue.
f. On October 15, WTI agreed to teach a four-month class (beginning Immediately) for an executive with payment due at
the end of the class. At December 31, $7,500 of the tuition revenue has been earned by WTI.
g. WTI's two employees are pald weekly. As of the end of the year, two days' salarles have accrued at the rate of $100 per
day for each employee.
h. The balance In the Prepald Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
Debit
$ 34,000
Credit
Cash
Accounts receivable
Teaching supplies
Prepaid insurance
Prepaid rent
Professional library
Accumulated depreciation-Professional library
Equipment
Accumulated depreciation-Equipment
Accounts payable
Salaries payable
8,00e
12,0ee
3,000
35,00e
$ 10,000
15,e00
26,000
Unearned revenue
12,5e0
T. Wells, Capital
90,eee
T. Wells, Withdrawals
Tuition revenue
5e,00e
123,9e0
40,eee
Training revenue
Depreciation expense-Professional library
Depreciation expense-Equipment
Salaries expense
Insurance expense
Rent expense
Teaching supplies expense
Advertising expense
Utilities expense
50,000
33,00e
e
6,00e
6,400
Totals
$ 317,400
$ 317,400](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e7d1569-7d45-4428-801b-0f8bcbd855e8%2F1e7eaa45-bc3e-4a20-9cc7-d1fb3c8c4938%2F1qrid0q_processed.png&w=3840&q=75)
As per accrual concept revenue should be recorded as and when earned by the entity irrespective of the fact whether received or not.
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