Required information [The following information applies to the questions displayed below.] Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,433 are available at year-end. c. Annual depreciation on the equipment is $11,227. d. Annual depreciation on the professional library is $5,614. e. On September 1, WTI agreed to do five training courses for a client for $2,700 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $13,500 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, $7,048 of the tuition revenue has been earned by WTI. g. 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. h. The balance in the Prepaid Rent account represents rent for December.
Required information [The following information applies to the questions displayed below.] Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,433 are available at year-end. c. Annual depreciation on the equipment is $11,227. d. Annual depreciation on the professional library is $5,614. e. On September 1, WTI agreed to do five training courses for a client for $2,700 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $13,500 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, $7,048 of the tuition revenue has been earned by WTI. g. 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. h. The balance in the Prepaid Rent account represents rent for December.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Question 6
![Required information
[The following information applies to the questions displayed below.]
Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers training
to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts.
Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjusting
entries on December 31.
Additional Information Items
a. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,433 are available at year-end.
c. Annual depreciation on the equipment is $11,227.
d. Annual depreciation on the professional library is $5,614.
e. On September 1, WTI agreed to do five training courses for a client for $2,700 each. Two courses will start immediately
and finish before the end of the year. Three courses will not begin until next year. The client paid $13,500 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, $7,048 of the tuition revenue has been earned by WTI.
g. 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.
h. The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
Debit
Credit
Cash
$ 27,849
Accounts receivable
Teaching supplies
Prepaid insurance
10,710
16,068
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers training
to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts.
Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjusting
entries on December 31.
Additional Information Items
a. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,433 are available at year-end.
c. Annual depreciation on the equipment is $11,227.
d. Annual depreciation on the professional library is $5,614.
e. On September 1, WTI agreed to do five training courses for a client for $2,700 each. Two courses will start immediately
and finish before the end of the year. Three courses will not begin until next year. The client paid $13,500 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, $7,048 of the tuition revenue has been earned by WTI.
g. 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.
h. The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
Debit
Credit
Cash
$ 27,849
Accounts receivable
Teaching supplies
Prepaid insurance
10,710
16,068
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Transcribed Image Text:WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
Debit
Credit
Cash
$ 27,849
Accounts receivable
Teaching supplies
Prepaid insurance
Prepaid rent
Professional library
Accumulated depreciation-Professional library
Equipment
Accumulated depreciation-Equipment
Accounts payable
Salaries payable
10,710
16,068
2,143
32,133
$ 9,641
96,000
17,139
25,000
13,500
22,996
78,000
Unearned revenue
Common stock
Retained earnings
42,845
Dividends
Tuition revenue
109,254
40,702
Training revenue
Depreciation expense-Professional library
Depreciation expense-Equipment
Salaries expense
51,415
Insurance expense
23,573
Rent expense
Teaching supplies expense
Advertising expense
Utilities expense
7,498
5,998
$ 316,232
$ 316,232
Totals
3-a. Prepare Wells Technical Institute's income statement for the year.
3-b. Prepare Wells Technical Institute's statement of retained earnings for the year. The Retained Earnings account balance was
$78,000 on December 31 of the prior year.
3-c. Prepare Wells Technical Institute's balance sheet as of December 31.
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