Question

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. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31. 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. Annual depreciation on the equipment is $10,170. Annual depreciation on the professional library is $5,085. On September 1, WTI agreed to do five courses for a client for $2,400 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 $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. 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, $6,498 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.

Answer 1

Answer:

Given below

Explanation:

Wells Technical Institute (WTI)

General Journal

31st December Journal Entries

Insurance Expense $2,542  Dr

Prepaid Insurance $2,542  Cr

• Insurance expired on Dec 31st

Inventory Account  $2,204  Dr

Prepaid Supplies  Account $2,204 Cr

The prepaid supplies is closed to inventory account and inventory account is closed to Income summary account.

Income Summary Account  $2,204  Dr

Inventory Account  $2,204  Cr

But if only adjusting entry is required not closing inventory  then

Prepaid Supplies  Account $2,204 Dr

Inventory Account  $2,204  Cr

Inventory account is adjusted with the Prepaid Supplies .

• An inventory count shows that teaching supplies costing $2,204 are available at year-end.

Depreciation Expense Equipment $10,170Dr

Accumulated Depreciation Equipment $10,170 Cr.

Depreciation Expense Library $5,085 Dr

Accumulated Depreciation Library  $5,085 Cr.

• Annual depreciation on the equipment is $10,170. Annual depreciation on the professional library is $5,085.

Unearned Training Fees $ 4800 Dr

Training Fees Earned $ 4800 Cr

• Fees for two course ( 2400*2= 4800) Earned.

Accounts Receivable Training Fees $6,498 Dr

Training Fees Earned $ $6,498  Cr

• 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, $6,498 of the tuition has been earned by WTI.

Salaries Expense $ 400 Dr.

Salaries Payable $ 400 Cr.

Salaries  for two employees ( 2* 2* 100= 400)  for 2 days.

• 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.