Prepare the necessary adjusting journal entries for items a

Assignment Help Accounting Basics

Reference no: EM13833262

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, 2013, 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, 2013, follow.

Additional Information Items

a.	An analysis of WTI's insurance policies shows that $2,700 of coverage has expired.
b.	An inventory count shows that teaching supplies costing $3,100 are available at year-end 2013.
c.	Annual depreciation on the equipment is $13,800.
d.	Annual depreciation on the professional library is $7,800.
e.	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 $3,100, 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 2014.
f.	On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,600 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.)
g.	WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $160 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, 2013
	Debit		Credit
Cash	$	40,000
Accounts receivable		0
Teaching supplies		8,600
Prepaid insurance		12,600
Prepaid rent		3,600
Professional library		41,000
Accumulated depreciation-Professional library			$	10,600
Equipment		86,000
Accumulated depreciation-Equipment				15,600
Accounts payable				32,600
Salaries payable				0
Unearned training fees				15,500
Common stock				16,000
Retained earnings				86,000
Dividends		56,000
Tuition fees earned				131,100
Training fees earned				46,000
Depreciation expense-Professional library		0
Depreciation expense-Equipment		0
Salaries expense		56,000
Insurance expense		0
Rent expense		36,000
Teaching supplies expense		0
Advertising expense		6,600
Utilities expense		7,000

Totals	$	353,400	$	353,400

rev: 11_07_2013_QC_38828,

12_04_2013_QC_38828,

02_26_2014_QC_45977

1. value: 10.00 pointsRequired information

1.	Prepare the necessary adjusting journal entries for items a through h.

Reference no: EM13833262

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