UNIVERSIDAD DEL TURABOESCUELA DE NEGOCIOS Y EMPRESARISMO

GURABO, PR

ACCO 500 - Financial Accounting

Libro: Financial Accounting - Information for DecisionsAsignación: Problema 3-2A

Nélida Ramos MolinaS00598030

General JournalWELLS TECHNICAL INSTITUTE

Date Description Debit Credit

Dec. 31 Insurance Expense 2,400

Adjustment (a) Prepaid Insurance 2,400

To record the insurance expired.

31 Teaching Supplies Expenses 5,200

Adjustment (b) Teaching Supplies 5,200

To record supplies used $8,000 -$2,800

31 Depreciation Expense Equipment 13,200

Adjustment (c) Accumulated Depreciation Equipment 13,200

To record equipment depreciation.

31 Depreciation Expense Professional Library 7,200

Adjustment (d) Accumulated depreciation Professional Library 7,200

To record professional library depreciation.

31 Unearned Training fees 5,000

Adjustment (e) Training Fees Earned 5,000

To record 2 month’s training fees collected in advanced.

31 Accounts Receivable 7,500

Adjustment (f) Tuition Fee Earned 7,500

To record tuition earned $3,000 x 2 1/2 months.

31 Salaries Expense 400

Adjustment (g) Salaries Payable 400

To record accrued salaries 2 days x $100 x 2 employees.

31 Prepaid Rent 3,000

Adjustment (h) Rent Expense 3,000

To record prepaid rent.

Problem: 3-2A

Page 1

WELLS TECHNICAL INSTITUTE

Income Statement

For Year Ended December 31, 2008

Revenues

Tuition fees earned $131,400.00

Training fees earned 45,000

Total revenues $176,400.00

Expenses

Depreciation expense - Professional library 7,200

Depreciation expense - Equipment 13,200

Salaries expense 50,400

Insurance expense 2,400

Rent expense 36,000

Teaching supplies expense 5,200

Advertising expense 6,000

Utilities expenses 6,400

Total expenses 126,800

Net income $49,600.00

WELLS TECHNICAL INSTITUTE

Statement of Retained Earnings

For Year Ended December 31, 2008

Retained earnings, December 31, 2007 10,000

Plus: Net income 49,600

59,600

Less: Dividends 50,000

Retained earnings, December 31, 2008 $9,600.00

WELLS TECHNICAL INSTITUTE

Balance Sheet

December 31, 2008

Assets

Cash $34,000.00

Accounts receivable 7,500

Teaching supplies 2,800

Prepaid insurance 9,600

Professional library $35,000.00

Accumulated depreciation - Professional library

(17,200) 17,800

Equipment 80,000

Accumulated depreciation - Equipment (28,200) 51,800

Total assets $123,500.00

Liabilities

Accounts payable $26,000.00

Salaries payable 400

Unearned training fees 7,500

Total liabilities 33,900

Equity

Common stock 80,000

Retained earnings 9,600

Total liabilities and equity $123,500.00

WELLS TECHNICAL INSTITUTE

Work Sheet

December 31, 2008

Account TitlesUnadjusted Trial

BalanceAdjustment Adjusted Trial

BalanceIncome

StatementBalance Sheet

Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.

Cash 34,000 34,000 34,000

Accounts receivable 0 (f) 7,500 7,500 7,500

Teaching supplies 8,000 (b) 5,200 2,800 2,800

Prepaid insurance 12,000 (a) 2,400 9,600 9,600

Prepaid rent 3,000 (h) 3,000 0

Professional library 35,000 35,000

Accumulated depreciation - Professional library

10,000 (d) 7,200 17,200 17,200

Equipment 80,000 80,000 80,000

Accumulated depreciation - Equipment

15,000 (c) 13,200 28,200 28,200

Accounts Payable 26,000 26,000 26,000

Salaries payable 0 (g) 400 400 400

Unearned training fees 12,500 (e) 5,000 7,500 7,500

Common stock 80,000 80,000 80,000

Retained earnings 10,000 10,000 9,600

Dividends 50,000 50,000

Tuition fees earned 123,900 (f) 7,500 131,400 131,400

Training fees earned 40,000 (e) 5,000 45,000 45,000

Depreciation expense - Professional library

0 (d) 7,200 7,200 7,200

Depreciation expense - Equipment

0 (c) 13,200 13,200 13,200

Salaries expense 50,000 (g) 400 50,400 50,400

Insurance expense 0 (a) 2,400 2,400 2,400

Rent expense 33,000 (h) 3,000 36,000 36,000

Teaching supplies expense

0 (b) 5,200 5,200 5,200

Advertising expense 6,000 6,000 6,000

Utilities expense 6,400 6,400 6,400

Totals 317,400 317,400 43,900 43,900 345,700 345,700 126,800 176,400 133,900 169,900

Net Income 49,600 35,000

Totals 176,400 176,400 169,900 169,900