Questions: Wells Technical institute (WTI) 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 that require adjusting entries on December 31. Additional Information items a. An analysis of WTI's insurance policies shows that 2,807 of coverage has expired. b. An inventory count shows that teaching supplies costing 2,433 are available at year-end. c. Annual depreciation on the equipment is 11,227. d. Annual depreciation on the professional library is 5,614. e. On September 1, WTI agreed to do five training 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 training courses on September 1, and WTI credited Unearned Revenue. f. 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, 7,798 of the tuition revenue has been earned by WTI. 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. h. The balance in the Prepaid Rent account represents rent for December.

To address the question, we need to make the necessary adjusting entries based on the additional information provided and then prepare an adjusted trial balance. Here are the steps to follow:

1. Insurance Expense:

   • Given: $2,807 of insurance coverage has expired.
   • Adjusting Entry:

     Insurance Expense       2,807
       Prepaid Insurance              2,807
     

2. Teaching Supplies:

   • Given: $2,433 of teaching supplies are available at year-end.
   • Initial balance of Teaching Supplies: $10,478
   • Used supplies: $10,478 - $2,433 = $8,045
   • Adjusting Entry:

     Teaching Supplies Expense       8,045
       Teaching Supplies                      8,045
     

3. Depreciation on Equipment:

   • Given: Annual depreciation is $11,227.
   • Adjusting Entry:

     Depreciation Expense - Equipment       11,227
       Accumulated Depreciation - Equipment          11,227
     

4. Depreciation on Professional Library:

   • Given: Annual depreciation is $5,614.
   • Adjusting Entry:

     Depreciation Expense - Professional Library       5,614
       Accumulated Depreciation - Professional Library          5,614
     

5. Unearned Revenue:

   • Given: $12,000 received for five training courses, two completed by year-end.
   • Revenue for completed courses: 2/5 * $12,000 = $4,800
   • Adjusting Entry:

     Unearned Revenue       4,800
       Training Revenue              4,800
     

6. Tuition Revenue:

   • Given: $7,798 of tuition revenue earned by December 31.
   • Adjusting Entry:

     Accounts Receivable       7,798
       Tuition Revenue                  7,798
     

7. Salaries Payable:

   • Given: Two days' salaries accrued at $100 per day for each of two employees.
   • Total accrued salaries: 2 days * $100/day * 2 employees = $400
   • Adjusting Entry:

     Salaries Expense       400
       Salaries Payable              400
     

8. Prepaid Rent:

   • Given: The balance in the Prepaid Rent account represents rent for December.
   • Adjusting Entry:

     Rent Expense       15,719
       Prepaid Rent              15,719
     

After posting the adjusting entries, the adjusted trial balance will be as follows:

\[ \begin{array}{|l|r|r|} \hline \text{Account} & \text{Debit} & \text{Credit} \\ \hline \text{Cash} & 27,245 & \\ \text{Accounts Receivable} & 35,043 & \\ \text{Teaching Supplies} & 2,433 & \\ \text{Prepaid Insurance} & 0 & \\ \text{Prepaid Rent} & 0 & \\ \text{Professional Library} & 31,436 & \\ \text{Accumulated Depreciation - Professional Library} & & 37,050 \\ \text{Equipment} & 101,000 & \\ \text{Accumulated Depreciation - Equipment} & & 27,995 \\ \text{Accounts Payable} & & 26,300 \\ \text{Salaries Payable} & & 400 \\ \text{Unearned Revenue} & & 7,800 \\ \text{Common Stock} & & 23,557 \\ \text{Retained Earnings} & & 41,916 \\ \text{Dividends} & 41,916 & \\ \text{Tuition Revenue} & & 114,683 \\ \text{Training Revenue} & & 44,620 \\ \text{Depreciation Expense - Professional Library} & 5,614 & \\ \text{Depreciation Expense - Equipment} & 11,227 & \\ \text{Salaries Expense} & 50,780 & \\ \text{Insurance Expense} & 2,807 & \\ \text{Rent Expense} & 39,386 & \\ \text{Teaching Supplies Expense} & 8,045 & \\ \text{Advertising Expense} & 7,336 & \\ \text{Utilities Expense} & 5,868 & \\ \hline \text{Totals} & 368,136 & 368,136 \\ \hline \end{array} \]

This adjusted trial balance reflects the updated balances after considering the necessary adjustments.