WELLS CH 3 ACCT211

School: Liberty University Online Academy - Course: ACCT 211 - Subject: Accounting

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 itemsathroughhthat require adjusting entries on December 31. Additional Information Items a.An analysis of WTI's insurance policies shows that $3,203 of coverage has expired. b.An inventory count shows that teaching supplies costing $2,776 are available at year-end. c.Annual depreciation on the equipment is $12,814. d.Annual depreciation on the professional library is $6,407. e.On September 1, WTI agreed to do five training courses for a client for $2,300 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 $11,500 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, $10,000 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

WELLS TECHNICAL INSTITUTE DebitCredit Cash$ 26,491 Accounts receivable0 Teaching supplies10,187 Prepaid insurance15,284 Prepaid rent2,039 Professional library30,565 Accumulated depreciation—Professional library $ 9,171 Equipment102,000 Accumulated depreciation—Equipment16,303 Accounts payable22,000 Salaries payable0 Unearned revenue11,500 Common stock28,880 Retained earnings81,000