Question

a. An analysis of WTI's insurance policies shows that $2,674 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,318 are available at year-end.
c. Annual depreciation on the equipment is $10,698.
d. Annual depreciation on the professional library is $5,349.
e. On September 1, WTI agreed to do five courses for a client for $3,000 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 $15,000 cash in advance
for all five 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, $5,653 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.

Answer 1

The preparation of WTI Insurance Company's income statement for the year is as follows:

WTI Insurance Company

Income Statement

For the year ended December 31,

Tuition Fees                                                                $109,577

Training Fees                                                                  48,717

Total Revenue                                                          $154,694

Expenses:

Depreciation Expense -Professional Library $5,349

Deprecation Expense - Equipment                10,698

Salaries Expense                                            49,307

Insurance Expense                                           2,674

Rent Expense                                                 24,468

Teaching Supplies Expense                           7,869

Advertising Expense                                        7,132

Utility Expense                                                5,706

Total expenses                                                           $113,203

Net income                                                                 $45,091

How do you prepare Income Statements from Unadjusted Trial Balance?

To prepare an income statement from an unadjusted trial balance, you must take into consideration all the necessary end-of-period adjustments.

The adjustments ensure that the financial statements are prepared in accordance with the accrual basis.  The accrual concept requires every expense and revenue for the period to be accounted for or recognized, whether received in cash or paid for.

Question Completion with Data from Unadjusted Trial Balance:

Tuition Fees $103,924

Training Fees 38,717

Depreciation Expense -Professional Library $0

Deprecation Expense - Equipment $0

Salaries Expense $48,907

Insurance Expense $0

Rent Expense 22,429

Teaching Supplies Expense $0

Advertising Expense $7,132

Utility Expense $5,706

See attachment for more information.

Required: Prepare the income statement to show the net income.

Adjustments:

a. Insurance Expense $2,674

b. Teaching Supplies Expense = $7,869 ($10,187 - $2,318)

c. Depreciation Expense - Equipment = $10,698

d. Depreciation Expense - Professional Library = $5,349

e. Training Fees = $48,717 ($38,717 + $10,000)

f. Tuition Fees $109,577 (103,924 + $5,653)

g. Salaries Expense $49,307 ($48,907 + $100 x 4)

h. Rent Expense = $24,468 ($22,429 + $2,039)

Thus, the income statement of WTI's Insurance shows a net income of $45,091.

Learn more about preparing an income statement at https://brainly.com/question/24498019