The schedule presents the trial balance for New Wave Dance Studio, Inc at the end of the current fiscal year. The following information is available to assist in the preparation of adjusting entries:

New Wave Dance Studio, Inc

Trial Balance

October 31, 2002

Cash

RM 1,028

Account receivable

517

Supplies

170

Prepaid rent

400

Prepaid Insurance

360

Equipment

9,100

Accumulated depreciation equipment

RM 400

Account payable

380

Unearned dance fees

900

Common stock

1,500

Retained earnings

1,000

Dividends

12,000

Dance fees

25,995

Wage expenses

3,200

Rent expenses

2,200

Utility expenses

1,200

RM 30,175

RM 30,175

The following information is available to assist in the preparation of adjusting entries:

  1. An inventory of supplies reveals RM92 still on hand.
  2. The prepaid rent reflects the rent for October plus the rent for the last month of lease.
  3. Prepaid insurance consists of a two year policy purchased on May1, 2002.
  4. Depreciation on equipment is estimated to be RM 800.
  5. Accrued wages are RM65 on October 31.
  6. Two third of the unearned dance fees have been earned by October 31.
  7. Management estimates federal income taxes for the year to be RM 3,000.

Instructions:

  1. Open the Column account in the trial balance.
  2. Determine adjusting entries and post them directly to the Column account.
  3. Prepare adjusted trial balance.
  4. Prepare Income Statements, statement of Retained Earnings, and Balance Sheet.