Wells Technical Institute (WTI), a school owned by Tristana Wells, provides tral
ID: 2547908 • Letter: W
Question
Wells Technical Institute (WTI), a school owned by Tristana Wells, provides tralning to Individuals who pay tultion directly to the school. WTI also offers tralning to groups In off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI Initially records prepald expenses and unearned revenues In balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2017, follow. Additlonal Informatlon Items a. An analysis of wTl's Insurance policies shows that $3.335 of coverage has expired. b. An Inventory count shows that teaching suppliles costing $2,891 are avallable at year-end 2017 c. Annual depreclation on the equipment is $13,342 d. Annual depreclation on the professlonal library Is $6,671. e. On November 1, WTI agreed to do a special six-month course (starting Immedlately) for a client. The contract calls for a monthly fee of $2,400, and the client pald the first five months' fees In advance. When the cash was recelved, the Unearned Tralning Fees account was credited. The fee for the sixth month will be recorded when It is collected In 2018 f. On October 15, WTI agreed to teach a four-month class (beginning Immediately) for an Indlvidual for $4,161 tultion 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 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, 2817 Debit Credit Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation-Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals $ 26,944 18, 362 15,545 2,873 31,888 $ 9,328 72,533 16,582 36, 782 12,88e 12,88e 53,988 41,452 185,781 39,379 49,743 22,883 7,254 5, 803 $ 285,68 285,686Explanation / Answer
Wells Technical Institute(WTI) Adjusted Journal Entries December 31st 2017 Particular Amount (DR) Amount(Cr) a) Insurance $ 3,335.00 To Prepaid Insurance $ 3,335.00 (Being amount of prepaid insurance transfer to insurance a/c ) b) Teaching supplies Expenses=($10362-$2891) $ 7,471.00 To Teaching supplies $ 7,471.00 (Being amount of Teaching supplies expenses) c ) Depreciation -Equipment $ 13,342.00 To Accumulated Depreciation-Equipment $ 13,342.00 (Being amount of Depreciation on Equipment) d) Depreciation-Professional Library $ 6,671.00 To Accumulated Depreciation-Professional Library $ 6,671.00 (Being amount of Depreciation on Professional Library) e) Unearned Training Fees($2400*2) $ 4,800.00 To Training Fees Earned $ 4,800.00 (Being amount of Unearned Training fees) h) Accounts receivable=($4161*3) $ 12,483.00 To Tuition Fees earned $ 12,483.00 (Being amount of tuition fees due from Oct to Dec ($4161*3)) g) Salaries=($100*2employees*2 days)=($100*2*2) $ 400.00 To Salary Payable $ 400.00 (Being amount of salary due) h) Rent A/c $ 2,073.00 To Prepaid Rent $ 2,073.00 (Being amount of Rent for Dec) Note: As per transaction (e ) Entry was passed at the time of receiving cash on 1st Nov for 5 months Cash A/C To Unearned Trainng fees After providing Two months training on Dec 31st unearned Training fees would be transferred to Training fees earned for the month of Nov and Dec Cash A/c Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 26,944.00 By Balance C/d $ 26,944.00 Total $ 26,944.00 Total $ 26,944.00 Accounts Receivable A/c Particular Amount(DR) Particular Amount (CR) To Tuition fees Earned $ 12,483.00 By Balance C/d $ 12,483.00 Total $ 12,483.00 Total $ 12,483.00 Teaching Supplies A/c Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 10,362.00 By Teaching supplies Expenses $ 7,471.00 By Balance c/d $ 2,891.00 Total $ 10,362.00 Total $ 10,362.00 Prepaid Insurance A/c Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 15,545.00 By Insurance $ 3,335.00 By Balance c/d $ 12,210.00 Total $ 15,545.00 Total $ 15,545.00 Prepaid Rent A/c Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 2,073.00 By Rent A/c $ 2,073.00 Total $ 2,073.00 Total $ 2,073.00 Professional Library Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 31,088.00 By Balalnce C/d $ 31,088.00 Total $ 31,088.00 Total $ 31,088.00 Accumulated Depreciation-Professional Library Particular Amount(DR) Particular Amount (CR) To Balance C/d $ 15,999.00 By Balalnce B/d $ 9,328.00 By Depreciation-Professional Library $ 6,671.00 Total $ 15,999.00 Total $ 15,999.00 Accumulated Depreciation-Equipment Particular Amount(DR) Particular Amount (CR) To Balance C/d $ 29,924.00 By Balalnce B/d $ 16,582.00 By Depreciation-Equipment $ 13,342.00 Total $ 29,924.00 Total $ 29,924.00 Equipment Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 72,533.00 By Balalnce C/d $ 72,533.00 Total $ 72,533.00 Total $ 72,533.00 Accounts Payable Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 36,702.00 By Balalnce B/d $ 36,702.00 Total $ 36,702.00 Total $ 36,702.00 Salaries Payable Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 400.00 By Balalnce B/d $ - By Salaries $ 400.00 Total $ 400.00 Total $ 400.00 Unearned Training Fees Particular Amount(DR) Particular Amount (CR) To Training Fees Earned $ 4,800.00 By Balalnce B/d $ 12,000.00 To Balance C/d $ 7,200.00 Total $ 12,000.00 Total $ 12,000.00 Tuition Fees Earned Particular Amount(DR) Particular Amount (CR) To Balance C/d $ 122,984.00 By Balalnce B/d $ 105,701.00 By Accounts Receivable $ 12,483.00 Total By Unearned Training fees earned $ 4,800.00 $ 122,984.00 Total $ 122,984.00 Depreciation Expense-Professional Library Particular Amount(DR) Particular Amount (CR) To Balance B/d $ - By Balance C/d $ 6,671.00 To Accumulated Depreciation $ 6,671.00 Total $ 6,671.00 Total $ 6,671.00 Depreciation Expense-Equipment Particular Amount(DR) Particular Amount (CR) To Balance B/d $ - By Balance C/d $ 13,342.00 To Accumulated Depreciation $ 13,342.00 Total $ 13,342.00 Total $ 13,342.00 Salaries Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 49,743.00 By Balance C/d $ 50,143.00 To Salary Payable $ 400.00 Total $ 50,143.00 Total $ 50,143.00 Insurance Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d $ - By Balance C/d $ 3,335.00 To Prepaid Insurance $ 3,335.00 Total $ 3,335.00 Total $ 3,335.00 Rent Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 22,803.00 By Balance C/d $ 24,876.00 To Prepaid Rent $ 2,073.00 Total $ 24,876.00 Total $ 24,876.00 Teaching Supplies Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d By Balance C/d $ 7,471.00 To Teaching Supplies $ 7,471.00 Total $ 7,471.00 Total $ 7,471.00 Advertisement Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 7,254.00 By Balance C/d $ 7,254.00 Total $ 7,254.00 Total $ 7,254.00 Utilities Expenses Particular Amount(DR) Particular Amount (CR) To Balance B/d $ 5,803.00 By Balance C/d $ 5,803.00 Total $ 5,803.00 Total $ 5,803.00 Trial Balance Adjusted Trial Balance Dec 31st 2017 Accounts Title Debit Credit Cash $ 26,944.00 Accounts Receivable $ 12,483.00 Teaching Supplies $ 2,891.00 Prepaid Insurance $ 12,210.00 Prepaid Rent - Professional Library $ 31,088.00 Accumulated Depreciation-Professional library $ 15,999.00 Accumulated Depreciation-Equipment $ 29,924.00 Equipment $ 72,533.00 Accounts Payable $ 36,702.00 Salaries Payable $ 400.00 Unearned Training Fees $ 7,200.00 Common Stock $ 12,000.00 Retained Earnings $ 53,908.00 Dividend $ 41,452.00 Tuition Fees earned $ 122,984.00 Training Fees earned $ 39,379.00 Depreciation Expenses-Professional Library $ 6,671.00 Depreciation Expenses-Equipment $ 13,342.00 Salaries Expenses $ 50,143.00 Insurance Expenses $ 3,335.00 Rent Expenses $ 24,876.00 Teaching Supplies Expenses $ 7,471.00 Advertisement Expenses $ 7,254.00 Utilities Expenses $ 5,803.00 Total $ 318,496.00 $ 318,496.00
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