I need help doing an adjusted trial balance for this scenario- I have the unadju
ID: 2338726 • Letter: I
Question
I need help doing an adjusted trial balance for this scenario- I have the unadjusted TB and the adjusting entries listed after it.
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
An analysis of WTI's insurance policies shows that $2,542 of coverage has expired.
An inventory count shows that teaching supplies costing $2,204 are available at year-end 2017.
Annual depreciation on the equipment is $10,170.
Annual depreciation on the professional library is $5,085.
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 $2,300, 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 2018.
On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $2,699 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.)
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, 2017
Debit Credit
Cash $ 26,793
Accounts receivable 0
Teaching supplies 10,304
Prepaid insurance 15,458
Prepaid rent 2,062
Professional library 30,913
Accumulated depreciation—Professional library $ 9,275
Equipment 72,119
Accumulated depreciation—Equipment 16,489
Accounts payable 36,931
Salaries payable 0
Unearned training fees 11,500
Common stock 14,000
Retained earnings 51,539
Dividends 41,220
Tuition fees earned 105,108
Training fees earned 39,158
Depreciation expense—Professional library 0
Depreciation expense—Equipment 0
Salaries expense 49,464
Insurance expense 0
Rent expense 22,682
Teaching supplies expense 0
Advertising expense 7,214
Utilities expense 5,771
Totals $ 284,000 $ 284,000
Adjusting General Journal Entries
No Transaction General Journal Debit Credit
1 a. Insurance expense 2,542
Prepaid insurance 2,542
2 b. Teaching supplies expense 0
Teaching supplies 0
3 c. Depreciation expense—Equipment 10,170
Accumulated depreciation—Equipment 10,170
4 d. Depreciation expense—Professional library 5,085
Accumulated depreciation—Professional library 5,085
5 e. Unearned training fees 4,600
Training fees earned 4,600
6 f. Accounts receivable 6,748
Tuition fees earned 6,748
7 g. Salaries expense 400
Salaries payable 400
8 h. Rent expense 2,062
Prepaid rent 2,062
Explanation / Answer
Wells Technical Institute
Adjusted Trial Balance
Wells Technical Institute
Adjusted Trial Balance
31-Dec-17
Account Titles
Debit
Credit
Cash
$26,793
Accounts Receivable
$6,748
Teaching Supplies
$2,204
Prepaid Insurance
$12,916
Professional Library
$30,913
Accumulated Depreciation - Professional Library
$14,360
Equipment
$72,119
Accumulated Depreciation - Equipment
$26,659
Accounts Payable
$36,931
Salaries Payable
$400
Unearned Training Fees
$6,900
Common Stock
$14,000
Retained Earnings
$51,539
Dividends
$41,220
Tuition Fees Earned
$111,856
Training Fees Earned
$43,758
Depreciation Expense - Professional Library
$5,085
Depreciation Expense - Equipment
$10,170
Salaries Expense
$49,864
Insurance Expense
$2,542
Rent Expense
$24,744
Teaching Supplies Expense
$8,100
Advertising Expense
$7,214
Utilities Expense
$5,771
Total
$306,403
$306,403
Training fees earned portionis calculated as follows,
5 months prepaid = 5 x $2,300 = $11,500
2 months unearned portion Expired = 2 x 2,300 = $4,600
Unexpired portion as on Dec 31 = $6,900
The expired portion is added to Training Fee Earned, $6,900 + $39,158 = $43,758
Accounts receivable for-Tuition fees
Tuition fee for Oct 15 to Oct 31 = ½ month = $2,699 x ½ = $1,350
Tuition fee for Nov 1 – Dec 31 = 2 months = 2,699 x 2 = $5,398
Total accounts receivable, Dec 31 = $6,748
Total tuition fees as on Dec 31 = $6,748 + $105,108 = $111,856
Salaries payable, Dec 31 = 2 employees x $100 per employee per day x 2 days = $400
Salaries expense = $400 + $49,464 = $49,864
Prepaid insurance bal, dec 31 = $15,458 - $2,542 = $12,916
Rent expense = $22,682 + expired portion of prepaid rent (Dec rent) $2,062 = $24,744
Teaching supplies expense = $10,304 - $2,204 = $8,100
Teaching supplies, Dec 31 = $2,204
Wells Technical Institute
Adjusted Trial Balance
31-Dec-17
Account Titles
Debit
Credit
Cash
$26,793
Accounts Receivable
$6,748
Teaching Supplies
$2,204
Prepaid Insurance
$12,916
Professional Library
$30,913
Accumulated Depreciation - Professional Library
$14,360
Equipment
$72,119
Accumulated Depreciation - Equipment
$26,659
Accounts Payable
$36,931
Salaries Payable
$400
Unearned Training Fees
$6,900
Common Stock
$14,000
Retained Earnings
$51,539
Dividends
$41,220
Tuition Fees Earned
$111,856
Training Fees Earned
$43,758
Depreciation Expense - Professional Library
$5,085
Depreciation Expense - Equipment
$10,170
Salaries Expense
$49,864
Insurance Expense
$2,542
Rent Expense
$24,744
Teaching Supplies Expense
$8,100
Advertising Expense
$7,214
Utilities Expense
$5,771
Total
$306,403
$306,403
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