Answer Happy

Wells Technical Institute (WTI) provides training to individualswho pay tuition directly to the school. WTI also offers training togroups in off-site locations. WTI initially records prepaidexpenses and unearned revenues in balance sheet accounts. Itsunadjusted trial balance as of December 31 follows, along withdescriptions of items a through h that require adjusting entries onDecember 31. Additional Information Items An analysis of WTI'sinsurance policies shows that $3,600 of coverage has expired. Aninventory count shows that teaching supplies costing $3,120 areavailable at year-end. Annual depreciation on the equipment is$14,400. Annual depreciation on the professional library is $7,200.On September 1, WTI agreed to do five training courses for a clientfor $3,000 each. Two courses will start immediately and finishbefore the end of the year. Three courses will not begin until nextyear. The client paid $15,000 cash in advance for all five trainingcourses on September 1, and WTI credited Unearned Revenue. OnOctober 15, WTI agreed to teach a four-month class (beginningimmediately) for an executive with payment due at the end of theclass. At December 31, $10,200 of the tuition revenue has beenearned by WTI. WTI's two employees are paid weekly. As of the endof the year, two days' salaries have accrued at the rate of $100per day for each employee. The balance in the Prepaid Rent accountrepresents rent for December. WELLS TECHNICAL INSTITUTE UnadjustedTrial Balance December 31 Debit Credit Cash $ 27,094 Accountsreceivable 0 Teaching supplies 10,420 Prepaid insurance 15,632Prepaid rent 2,085 Professional library 31,262 Accumulateddepreciation—Professional library $ 9,380 Equipment 97,000Accumulated depreciation—Equipment 16,675 Accounts payable 25,000Salaries payable 0 Unearned revenue 15,000 Common stock 16,318Retained earnings 83,000 Dividends 41,684 Tuition revenue 106,293Training revenue 39,599 Depreciation expense—Professional library 0Depreciation expense—Equipment 0 Salaries expense 50,022 Insuranceexpense 0 Rent expense 22,935 Teaching supplies expense 0Advertising expense 7,295 Utilities expense 5,836 Totals $ 311,265$ 311,265 3-a. Prepare Wells Technical Institute's income statementfor the year. 3-b. Prepare Wells Technical Institute's statement ofretained earnings for the year. The Retained Earnings accountbalance was $83,000 on December 31 of the prior year. 3-c. PrepareWells Technical Institute's balance sheet as of December 31.