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 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 paid $12,500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
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, $9,500 of the tuition has been earned by WTI.
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.
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 0
Teaching supplies 10,710
Prepaid insurance 16,068
Prepaid rent 2,143
Professional library 32,133
Accumulated depreciation—Professional library $9,641
Equipment 96,000
Accumulated depreciation—Equipment 17,139
Accounts payable 23,000
Salaries payable 0
Unearned training fees 12,500
Common stock 24,996
Retained earnings 79,000
Dividends 42,845
Tuition fees earned 109,254
Training fees earned 40,702
Depreciation expense—Professional library0
Depreciation expense—Equipmen 0
Salaries expense 51,415
Insurance expense 0
Rent expense 23,573
Teaching supplies expense 0
Advertising expense 7,498
Utilities expense 5,998
Totals $ 316,232 $ 316,232
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 $79,000 on December 31 of the prior year.
3-c. Prepare Wells Technical Institute's balance sheet as of December 31.