Alternate problem E The following trial balance and additional data are for Roswell Interior Decorators, Inc.:

ROSWELL INTERIOR DECORATORS, INC Trial Balance 2010 December 31 Debits Credits Cash $ 85,400 Accounts Receivable 81,600 Supplies on Hand 4,000 Prepaid Rent 12,240 Prepaid Advertising 2,880 Prepaid Insurance 4,400 Office Equipment 7,600 Accumulated Depreciation—Office Equipment $ 2,760 Office Furniture 29,200 Accumulated Depreciation—Office Furniture 8,280 Accounts Payable 25,200 Notes Payable (due 2011) 4,000 Capital Stock 100,000 Retained Earnings, 2010 January 1 22,400 Dividends 45,520 Service Revenue 250,000 Salaries Expense 98,800 Utilities Expense 20,000 Miscellaneous Expense 24,000

$ 412,640 $ 412,640 Supplies on hand at 2010 December 31, are USD 1,000.

Rent expense for 2010 is USD 10,000.

Advertising expense for 2010 is USD 2,304.

Insurance expense for 2010 is USD 2,400.

Depreciation expense is office equipment, USD 912, and office furniture, USD 3,000.

Accrued interest on notes payable is USD 150.

Accrued salaries are USD 4,200.

a. Prepare a 12-column work sheet for the year ended 2010 December 31. You need not include account numbers or explanations of adjustments.

b. Prepare an income statement.

c. Prepare a statement of retained earnings.

d. Prepare a classified balance sheet.

e. Prepare adjusting and closing entries.