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Problem 3-1A Identifying adjusting entries with explanations LO C3, P1

For each of the following entries, enter the letter of the explanation that most closely describes

it in the space beside each entry. (You can use letters more than once.)

A.	To record receipt of unearned revenue.
B.	To record this period's earning of prior unearned revenue.
C.	To record payment of an accrued expense.
D.	To record receipt of an accrued revenue.
E.	To record an accrued expense.
F.	To record an accrued revenue.
G.	To record this period's use of a prepaid expense.
H.	To record payment of a prepaid expense.
I.	To record this period's depreciation expense.

lanation	Journal Entries	Debit	Credit
	Interest Expense	1,000
	Interest Payable		1,000

	Depreciation Expense	4,000
	Accumulated Depreciation		4,000

	Unearned Professional Fees	3,000
	Professional Fees Earned		3,000

	Insurance Expense	4,200
	Prepaid Insurance		4,200

	Salaries Payable	1,400
	Cash		1,400

	Prepaid Rent	4,500
	Cash		4,500

	Salaries Expense	6,000
	Salaries Payable		6,000

	Interest Receivable	5,000
	Interest Revenue		5,000

	Cash	9,000
	Accounts Receivable (from consulting)		9,000

	Cash	7,500
	Unearned Professional Fees		7,500

	Cash	2,000
	Interest Receivable		2,000

	Rent Expense	2,000
	Prepaid Rent		2,000

Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3

[The following information applies to the questions displayed below.]

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, 2013, 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, 2013, follow.

Additional Information Items

a.	An analysis of WTI's insurance policies shows that $2,400 of coverage has expired.
b.	An inventory count shows that teaching supplies costing $2,800 are available at year-end 2013.
c.	Annual depreciation on the equipment is $13,200.
d.	Annual depreciation on the professional library is $7,200.
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 $2,500, 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 2014.
f.	On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,000 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.)
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.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2013
	Debit	Credit
Cash	$	34,000
Accounts receivable		0
Teaching supplies		8,000
Prepaid insurance		12,000
Prepaid rent		3,000
Professional library		35,000
Accumulated depreciation—Professional library			$	10,000
Equipment		80,000
Accumulated depreciation—Equipment				15,000
Accounts payable				26,000
Salaries payable				0
Unearned training fees				12,500
T. Wells, Capital				90,000
T. Wells, Withdrawals		50,000
Tuition fees earned				123,900
Training fees earned				40,000
Depreciation expense—Professional library		0
Depreciation expense—Equipment		0
Salaries expense		50,000
Insurance expense		0
Rent expense		33,000
Teaching supplies expense		0
Advertising expense		6,000
Utilities expense		6,400

Totals	$	317,400	$	317,400

Problem 3-3A Part 1

Required:

Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries a

re made only at year-end.

Adjusting entries (all dated Dec. 31, 2013).

1. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired.

2. An inventory count shows that teaching supplies costing $2,800 are available at year-end 2013.

3. Annual depreciation on the equipment is $13,200.

4. Annual depreciation on the professional library is $7,200.

5. 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 $2,500, 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 2014.

6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,000 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.)

7. 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.

8. The balance in the Prepaid Rent account represents rent for December

Problem 3-3A Part 2

2.1

Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts

I can’t get the charts to copy here…

2.2	Prepare an adjusted trial balance.
WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31, 2013
	Debit	Credit
Cash
Accounts receivable
Teaching supplies
Prepaid insurance
Prepaid rent
Professional library
Accumulated depreciation—Professional library
Equipment
Accumulated depreciation—Equipment
Accounts payable
Salaries payable
Unearned training fees
T. Wells, Capital
T. Wells, Withdrawals
Tuition fees earned
Training fees earned
Depreciation expense—Professional library
Depreciation expense—Equipment
Salaries expense
Insurance expense
Rent expense
Teaching supplies expense
Advertising expense
Utilities expense
Totals