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, 2017,
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, 2017, follow.
Additional Information Items
WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2017 |
|||||
Debit | Credit | ||||
Cash | $ | 27,396 | |||
Accounts receivable | 0 | ||||
Teaching supplies | 10,536 | ||||
Prepaid insurance | 15,806 | ||||
Prepaid rent | 2,108 | ||||
Professional library | 31,610 | ||||
Accumulated depreciation—Professional library | $ | 9,484 | |||
Equipment | 73,751 | ||||
Accumulated depreciation—Equipment | 16,861 | ||||
Accounts payable | 37,522 | ||||
Salaries payable | 0 | ||||
Unearned training fees | 12,000 | ||||
Common stock | 15,000 | ||||
Retained earnings | 52,016 | ||||
Dividends | 42,149 | ||||
Tuition fees earned | 107,477 | ||||
Training fees earned | 40,040 | ||||
Depreciation expense—Professional library | 0 | ||||
Depreciation expense—Equipment | 0 | ||||
Salaries expense | 50,579 | ||||
Insurance expense | 0 | ||||
Rent expense | 23,188 | ||||
Teaching supplies expense | 0 | ||||
Advertising expense | 7,376 | ||||
Utilities expense | 5,901 | ||||
Totals | $ | 290,400 | $ | 290,400 | |
Required:
1. Prepare the necessary adjusting journal entries
for items a through h. Assume that adjusting
entries are made only at year-end.
Adjusting entry
No | General journal | Debit | Credit |
1 | Insurance expense | 3071 | |
Prepaid insurance | 3071 | ||
2 | Teaching supplies expense (10536-2662) | 7874 | |
Teaching supplies | 7874 | ||
3 | Depreciation expense | 12285 | |
Accumulated depreciation-equipment | 12285 | ||
4 | Depreciation expense | 6142 | |
Accumulated depreciation-Professional library | 6142 | ||
5 | Unearned training fees (2400*2) | 4800 | |
Training fees | 4800 | ||
6 | Account receivable (3640*2.5) | 9100 | |
Tuition fees | 9100 | ||
7 | Salaries expense (100*2*2) | 400 | |
Salaries payable | 400 | ||
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