Answer:
1) a. An analysis of WTI's insurance policies shows that $3,864 of coverage has expired.
Dr Insurance expense 3,864
Cr Prepaid insurance 3,864
b. An inventory count shows that teaching supplies costing $3,349 are available at year-end 2015.
Dr Teaching supplies expense 6,722
Cr Teaching supplies 6,722
c. Annual depreciation on the equipment is $15,458.
Dr Depreciation expense 15,458
Cr Accumulated depreciation: equipment 15,458
d. Annual depreciation on the professional library is $7,729.
Dr Depreciation expense 7,729
Cr Accumulated depreciation: professional library 7,729
e. 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 $2,900, 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 2016.
Dr Unearned training fees 5,800
Cr Training fees earned 5,800
f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,700 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.)
Dr Accounts receivable 11,750
Cr Tuition fees earned 11,750
g. 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.
Dr Salaries expense 400
Cr Salaries payable 400
h. The balance in the Prepaid Rent account represents rent for December.
Dr Rent expense 2,015
Cr Prepaid rent 2,015
2) Wells Technical Institute (WTI)
Adjusted Trial Balance
For the year ended December 31, 2015
Debit Credit
Cash $26,189
Accounts receivable $11,750
Prepaid rent $0
Teaching supplies $3,349
Prepaid insurance $11,246
Professional library $30,217
Accumulated depreciation: $16,795
Professional library
Equipment $70,500
Accumulated depreciation: $31,575
Equipment
Accounts payable $32,840
Salaries payable $400
Unearned training fees $8,700
Common stock $12,812
Retained earnings $51,250
Dividends $40,291
Tuition fees earned $114,490
Training fees earned $44,075
Depreciation expense: $7,729
Professional library
Depreciation expense: $15,458
Equipment
Salaries expense $48,750
Insurance expense $3,864
Rent expense $24,180
Teaching supplies expense $6,722
Advertising expense $7,051
Utilities expense <u> $5,641 </u> <u> </u>
Totals $312,937 $312,937
