The trial balance for Century Dance School at the end of its current accounting year appears at the top of the next page. Loretta Harper, the owner, made no investments in the business during the year. The following information is available to help in the preparation of adjusting entries:

a. An inventory of supplies reveals 276 still available

b. Prepaid Rent reflects the rent for July plus the rent for the last month of the lease.

c. Prepaid Insurance consists of a two-year policy purchased on February 1, 20×2.

d. Depreciation on equipment is estimated at 2,400 .

e. Accrued wages are 195 on July 31.

f. Two-thirds of the unearned dance fees had been earned by July 31 .

g. Management estimates income taxes for the year to be 9,000 .

REQUIRED 1. Record the adjusting entries in the general journal.
2. Open ledger accounts for the accounts in the trial balance plus: Wages Payable (214); Income Taxes Payable (215); Insurance Expense (515); Supplies Expense (516); Depreciation Expense, Equipment (519); Income Taxes Expense (520). Record the balances shown in the trial balance.
3. Post the adjusting entries from the general journal to the ledger, showing the correct references.
4. Prepare an adjusted trial balance, an income statement, and a balance sheet.

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Century Dance School Trial Balance July 31, 20x2 Cash (111) Accounts Receivable (113) Supplies (115) 5,084 3,551 510 Prepaid Rent (117) 1,200 Prepaid Insurance (118) 1,080 Equipment (144) 18,300 Accumulated Depreciation, Equipment (147) 1,200 Accounts Payable (212) 1,140 Unearned Dance Fees (213) 2,700 Share Capital (311) 4,500 Retained Earnings (312) 3,000 Dividends (313) 26,000 Dance Fees (411) 62,985 Wages Expense (511) 9,600 Electricity Expense (512) 3,600 Rent Expense (514) 6,600 75,525 75,525