Cash 3,250 Problem 4-9 Use of a Trial Balance to Record Adjusting Entries in T Accounts Four Star Video has been in the video rental business for five years. An unadjusted trial balance at May 31, 2016, follows. Four Star Video Unadjusted Trial Balance May 31, 2016 Debit Credit $ 4.000 Prepaid Rent 6.600 Video Inventory 25,000 Display Stands 8.800 Accumulated Depreciation $ 5,180 Accounts Payable Customer Subscriptions 4.450 Capital Stock 6,000 Retained Earnings 22,170 Rental Revenue 9.200 Wage and Salary pense 2.320 Utilities Expono 1.240 Advertising Bepense 600 Totals $49.260 $49,260 The following additional information is available: a. Four Star rents a store in a shopping mall and prepays the annual rent of S7,200 on April 1 of cach year. b. The asset account Video Inventory represents the cost of videos purchased from suppliers. When a new title is purchased from a supplier, its cost is debited to this account. When a title has served its useful life and can no longer be rented (cven at a reduced price), it is removed from the inventory in the store. Based on the monthly count, the cost of titles on hand at the end of May is $23,140, c. The display stands have an estimated useful life of five years and an estimated salvage value of $500 d. Wages and salaries owed but unpaid to employees at the end of May amount to $1,450. c. In addition to individual rentals, Four Star operates a popular discount subscription program. Cus- tomers pay an annual fee of $120 for an unlimited number of rentals. Based on the $10 per month fee on each of these subscriptions, the amount recognized for the month of May is $2,440. f Four Star accrucs income taxes using an estimated tax rate equal to 30% of the income for the month. Required 1. Set up T accounts for each of the accounts listed in the trial balance. Based on the additional information given, set up any other T accounts that will be needed to prepare adjusting entries. 2. Post the month-end adjusting entries directly to the Taccounts but do not bother to put the entries in journal format first. Use the letters (a) through (t) from the additional information to identify the entries. 3. Prepare a trial balance to prove the quality of debits and credits after posting the adjusting entries. 4. On the basis of the information you have, does Four Star appear to be a profitable business? Explain your