Required: i) Prepare the necessary year-end adjusting journal entries for Fuller Institute on June 30, 2012. [Narrations are not required] ii) Fill in the adjustments and adjusted trial balance columns in the Partial Work Sheet provided, (identifying each adjustment by letter). iii) From the adjusted trial balance prepared in part (ii) above, prepare an income statement and a statement of owners equity for the year ended June 30, 2012 and a classified balance sheet as at that date. [List expenses in decreasing order of their amount, starting with the largest] iv) Calculate Fullers current ratio and debt ratio at June 30, 2012. Explain what these two ratios measure and whether it is usually preferable to have a higher or lower ratio For each

The following is the unadjusted trial balance for Fuller Institute, as of the end of its 2012 fiscal year. The institute provides tutoring to individuals who pay tuition directly to the business. Cr $ Cash 52,000 9,000 FULLER INSTITUTE Trial Balance as at June 30, 2012 Dr $ 162,000 Tuition Fees Receivable 60,000 Teaching Supplies 18,000 Prepaid Insurance 48,000 Prepaid Rent 54,000 Computer Equipment 300,000 Accumulated Depreciation: Computer Equipment Accounts Payable Interest Payable Salaries Payable Unearned Tuition Fees Long-Term Note Payable Patricia Fuller, Capital Patricia Fuller, Withdrawals 28,000 Tuition Fees Earned Rent Expense Salaries Expense 145.000 Telephone Expense 15.000 Teaching Supplies Expense Interest Expense 9,000 Insurance Expense Depreciation Expense - Computer Equipment Utilities Expense 28,000 Total 948.000 30,000 120,000 285,000 452,000 81,000 948.000 Additional data at June 30, 2012: a) An inventory count shows that teaching supplies costing $6,000 are on hand at June 30, 2012 b) Rent was paid on April 1, 2012 for the 6-months to September 30, 2012. c) The computer equipment was acquired on March 1, 2012 and is being depreciated over 5 years on the straight-line method of depreciation, down to a residue of $30,000. d) The long-term note payable bears interest of 10% per year. The unadjusted Interest Expense account equals to the amount accrued for the first three quarters of the 2012 fiscal year. The accrued interest for the last quarter has not yet been paid nor recorded. e) f) A premium of $48,000 for a one-year insurance policy was paid on February 1, 2012 On June 1, 2012 the Institute agreed to offer a special four-month course (starting immediately). The contract calls for a $7,500 monthly fee. Two clients paid the first two months fees in advance. When the cash was received, the Unearned Tuition Fees was credited Employees earned $5,000 of unpaid and unrecorded salaries as of June 30, 2012. Accrued but unrecorded and uncollected tuition fees earned total $25,000. h) Other information: Note that the business is expected to make a $30,000 payment toward the note payable during the 2013 fiscal year. Required: i) Prepare the necessary year-end adjusting journal entries for Fuller Institute on June 30, 2012. [Narrations are not required] ii) Fill in the adjustments and adjusted trial balance columns in the Partial Work Sheet provided, (identifying each adjustment by letter)