An analysis of wti insurance policies shows that

The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2 should appear as follows: PS Music UNADJUSTED TRIAL BALANCE July 31, 2016 ACCOUNT TITLE DEBIT CREDIT 1 Cash 9,945.00 2 Accounts Receivable 2,750.00 3 Supplies 1,020.00 4 Prepaid Insurance 2,700.00 5 Office Equipment 7,500.00 6 Accounts Payable 8,350.00 7 Unearned Revenue 7,200.00 8 Common Stock 9,000.00 9 Dividends 1,750.00 10 Fees Earned 16,200.00 11 Wages Expense 2,800.00 12 Office Rent Expense 2,550.00 13 Equipment Rent Expense 1,375.00 14 Utilities Expense 1,215.00 15 Music Expense 3,610.00 16 Advertising Expense 1,500.00 17 Supplies Expense 180.00 18 Miscellaneous Expense 1,855.00 19 Totals 40,750.00 40,750.00 The data needed to determine adjustments are as follows: • During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. Since the company only contracted for 80 hours per month, make an adjusting entry to accrue the additional 35 hours of service. NOTE: The unearned revenue account will not be affected in this adjustment. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3, 2016, transaction at the end of Chapter 2.* • Supplies on hand at July 31, $275. • The balance of the prepaid insurance account relates to the July 1, 2016, transaction at the end of Chapter 2.* • Depreciation of the office equipment is $50. • The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3, 2016, transaction at the end of Chapter 2.* • Accrued wages as of July 31, 2016, were $140. *The chapter 2 list of transactions are included in a separate panel of this problem for your convenience. 1. Prepare adjusting journal entries on page 3 of the journal. (Please note that pages 1 and 2 show the transactions that were recorded in Continuing Problem 2 from chapter 2.) Refer to the Chart of Accounts for exact wording of account titles. Note that Chart of Accounts has the following additional accounts: 18 Accumulated Depreciation-Office Equipment; 22 Wages Payable; 57 Insurance Expense; 58 Depreciation Expense. 2. Post the adjusting entries, inserting balances in the accounts affected. Do not enter anything in the Item column. Indicate a zero balance by inserting a 0 (zero) in either of the Balance columns opposite the adjusting entry. 3. Prepare an adjusted trial balance.

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Question:

Wells Technical Institute (WTI), a school owned by Tristan 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

a. An analysis of WIT's insurance policies shows that $3,732 of coverage has expired.

b. An inventory count shows that teaching supplies costing $3,235 are available at year-end.

c Annual depreciation on the equipment is $14,929.

d. Annual depreciation on the professional library is $7,464.

e. On September 1, WTI agreed to do five 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 courses on September 1, and WTI credited Unearned Training Fees.

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, $11,350 of the tuition 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.

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

B) Prepare an adjusted trial balance.

Adjusting Entry:

Adjusting Entry is an entry made at the end of the accounting period to reflect revenue and expenses on the period that it is earned and incurred. The adjusting entry requires one income statement account and one balance sheet account.

Answer and Explanation:

a)

Prepaid Insurance:

Insurance Expense:

Teaching...

See full answer below.