Wells Technical Institute (WTI) provides training to individuals who pay tuition directly to the school. WTI also offers train to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet account Its unadjusted trial balance as of December 31 follows, along with descriptions of items a through h that require adjustin entries on December 31. Additional Information Items a. An analysis of WTI's insurance policies shows that $3,600 of coverage has expired. b. An inventory count shows that teaching supplies costing $3,120 are available at year-end. c. Annual depreciation on the equipment is $14,400. d. Annual depreciation on the professional library is $7,200. e. On September 1, WTI agreed to do five training courses for a client for $2,800 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
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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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 h that require adjusting
entries on December 31.
Additional Information Items
a. An analysis of WTI's insurance policies shows that $3,600 of coverage has expired.
b. An inventory count shows that teaching supplies costing $3,120 are available at year-end.
c. Annual depreciation on the equipment is $14,400.
d. Annual depreciation on the professional library is $7,200.
e. On September 1, WTI agreed to do five training courses for a client for $2,800 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
$14,000 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, $10,700 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.
Cash
Accounts receivable.
Teaching supplies
Prepaid insurance
Prepaid rent
Professional library.
Accumulated depreciation-Professional library
Equipment
Accumulated depreciation-Equipment
Accounts payable
Salaries payable
Unearned revenue
Common stock
Retained earnings
Dividends
Tuition revenue
Training revenue
Depreciation expense-Professional library
Depreciation expense-Equipment
Salaries expense
Insurance expense
Rent expense
Teaching supplies expense
Advertising expense
Utilities expense
Totals
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
No
Transaction
General Journal
Debit
$ 26,340
0
10,129
15,197
2,027
30, 391
96,000
40,523
0
0
48,628
0
22, 297
0
7,092
5,673
$ 304,297
Credit
$9,119
16, 210
23,000
0
14,000
24,140
76,000
103,332
38,496
$ 304,297
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbbe2d55-00a4-408d-a96e-5df7f99c9d72%2F5c088e21-a38a-4734-8daf-91afe795bcd1%2Fca1uzgc_processed.png&w=3840&q=75)
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