Written Assignment – Need 300 Words Fro Each Question – No Copy From Internet Plz
July 13, 2019
Nursing Question/2 Papers / 2 Pages each/Detailed answers/ No plagiarism
July 13, 2019

Preparing adjusting entries,

adjusted trial balance, and

financial statements

Watson Technical Institute (WTI), a school owned by Tom Watson, 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, 2005, 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, 2005, follow.

Additional Information Items

a. An analysis of the school’s insurance policies shows that $3,000 of coverage has expired.

b. An inventory count shows that teaching supplies costing $2,600 are available at year-end 2005.

c. Annual depreciation on the equipment is $12,000.

d. Annual depreciation on the professional library is $6,000.

e. On November 1, the school agreed to do a special six-month course (starting immediately) for a

client. The contract calls for a monthly fee of $2,200, 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 2006.

f. On October 15, the school 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 services are being

provided as agreed, and no payment has yet been received.

g. The school’s two employees are paid weekly. As of the end of the year, two days’ wages have

accrued at the rate of $100 per day for each employee.

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

Required

1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance.

2. Prepare the necessary adjusting journal entries for items a through h and post them to the

T-accounts. Assume that adjusting entries are made only at year-end.

3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance.

4. Prepare Watson Technical Institute’s income statement and statement of owner’s equity for the

year 2005 and prepare its balance sheet as of December 31, 2005.

Check (2e) Cr.Training Fees Earned,

$4,400; (2f ) Cr.Tuition Fees Earned,

$7,500; (3) Adj.Trial balance totals,

$301,500; (4) Net income, $38,500;

Ending T.Watson, Capital $62,100

Cash                                 Debit 26,000

Accounts receivable     0

Teaching supplies                   Debit  10,000                                         

Prepaid insurance                 Debit 15,000

Prepaid rent                             Debit  2,000

Professional library                               Debit 30,000

Accumulated depreciation—Professional library     Credit  9,000

Equipment                                              Debit 70,000

Accumulated depreciation—Equipment              credit 16,000

Accounts payable                          Credit 36,000

Salaries payable        0

Unearned training fees        credit 16,000

Tuition fees earned           credit 102,000

Training fees earned                 credit 38,000

Depreciation expense—Professional library     0

Depreciation expense—Equipment                0

Salaries expense                          Debit 48,000

Insurance expense                         0

Rent expense                                       debit 22,000

Teaching supplies expense                   0

Advertising expense                              Debit 7,000

Utilities expense                                   Debit  5,600

T. Watson, Capital                                 Credit 63,600

T. Watson, Withdrawals                        Debit 40,000

Totals  275,600 

Required:

Adjusting Entries, T-Accounts, Adjusted Trial Balance, Income Statement, Balance Sheet.

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