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P3-2B Maquoketa River Resort opened for business on June 1 with eight air- conditioned units.Its trial belance before adjustment on August 31 is as follows MAQUOKETA RIVER RESORT Trial Balance August 31, 2019 $ 19,600 3,300 6,000 101 126 130 140 141 Prepaid Insurance Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock 6,500 7,400 80,000 100,000 201 311 80,000 Rent Revenue Maintenance and Repairs Salaries and Wages Expense Utilities Expense 51,000 9,.400 732 $273.900 $273.900 In addition to those accounts listed on the trial balance, the chart of accounts for Maquoketa River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 142 Accumulated Depreciation- Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data 1. Insurance expires at the rate of $300 per month. 2. A count on August 31 shows $800 of supplies on hand. 3. Annual depreciation is $6,000 on buildings and $2,400 on equipment 4. Uneamed rent revenue of $4,800 has been eamed 5. Salaries of $400 were unpaid at August 31 6. Rentals of $4,000 were due from tenants at August 31 7. The mortgage interest rate is 9% per year (The mortgage was taken out on August 1.) Instructions (a) Journalize the adjusting entries on August 31 for the 3-month period June 1- (b) Prepare a ledger using the three-column form of account. Enter the trial (c) Adj, trial balance the $281,000 August 31 balance amounts and post the adjusting entries. (Use J1 as the posting reference.) d) Prepare an income statement and a retained eamings statement for the 3 months ending August 31 and a balance sheet as of August 31
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Answer #1

Answer to Part A:

PART A ournal Entries Date Account Ref Debit Credit 722 $ 130 31-Aug Insurance expense ($ 300 3) (To record part of prepaid insurance expired) 31-Aug Supplies expense (3300 800) To record supplies expense for the 3 months) 900 Prepaid Insurance 900 631 2,500 126 Supplies $ 2,500 Depreciation Expense 31-Aug (6000*3/12) 619 1,500 Accumulated Depreciation - Buildings 142 $ 1,500 To record depreciation expense for buildings) Depreciation Expense 31-Aug (2400/12*3) 619 $ 600 Accumulated Depreciation - Equipment 150 600 (To record depreciation expense for equipment)

Part A Answers:

Date Account Ref Debit Credit 208 $ 4,800 429 31-Aug Unearned Revenue Rent Revenue $ 4,800 (To record part of unearned revenue earned) 726 400 212 31-Aug Salaries expense S400 Salaries payable To record accrued salaries expense) 31-Aug Accounts Receivable Rent Revenue 112 $ 4,000 429 $ 4,000 To record revenue earned but not received) Interest expense 718 600 230 31-Aug (80,000*9%*1/12) Interest payable 600 To record interest accrued on Mortgage)

Part B: Three Column Format of Account

PART B Cash Date Aug. 31 No. 101 Explanation Ref Debit Credit Balance Balance 19,600 Accounts Receivable Date Aug. 31 Adjusting No. 112 Explanation Ref Debit Credit Balance 4,000 4,000 Supplies Date Aug. 31 Balance Aug. 31 Adjusting No. 126 Explanation Ref Debit Credit Balance 3,300 800 2,500 Prepaid Insurance Date Aug. 31 Balance Aug. 31 Adjusting No. 130 Explanation Ref Debit Credit Balance 6,000 5,100 900

Part B: Three Column Format of Account

Land Date Aug. 31 Balance No. 140 Explanation Ref Debit Credit Balance 25,000 Buildings Date Aug. 31 Balance No. 141 Explanation Ref Debit Credit Balance 1,25,000 Accumulated Depreciation Building:s Date Aug. 31 Adjusting No. 142 Explanation Ref Debit Credit Balance 1,500 1,500 Equipment Date Aug. 31 Balance No. 149 Explanation Ref Debit Credit Balance 26,000

Part B: Three Column Format of Account

Accumulated Depreciation Equipment Date Aug. 31 Adjusting No. 150 Explanation Ref Debit Credit Balance 600 600 Accounts Payable Date Aug. 31 Balance No. 201 Explanation Ref Debit Credit Balance 6,500 Unearned Revenue Date Aug. 31 Balance Aug. 31 Adjusting No. 208 Explanation Ref Debit Credit Balance 7,400 2,600 4,800 Salaries Payable Date Aug. 31 Adjusting No. 212 Explanation Ref Debit Credit Balance 400 400 Interest Payable Date Aug. 31 Adjusting No. 230 Explanation Ref Debit Credit Balance 600 600

Part B: Three Column Format of Account

Mortgage Payable Date Aug. 31 Balance No. 275 Explanation Ref Debit Credit Balance 80,000 Common Stock Date Aug. 31 Balance No. 311 Explanation Ref Debit Credit Balance 1,00,000 Dividends Date Aug. 31 Balance No. 322 Explanation Ref Debit Credit Balance 5,000 Rent Revenue Date Aug. 31 Balance Aug. 31 Adjusting Aug. 31 Adjusting No. 429 Explanation Ref Debit Credit Balance 80,000 4,80084,800 4,00088,800

Part B: Three Column Format of Account

Depreciation expense Date Aug. 31 Adjusting Aug. 31 Adjusting No. 619 Explanation Ref Debit Credit Balance 1,500 600 1,500 2,100 Maintenance and Repairs expense Date Aug. 31 Balance No. 622 Explanation Ref Debit Credit Balance 3,600 Supplies expense Date Aug. 31 Adjusting No. 631 Explanation Ref Debit Credit Balance 2,500 2,500 Interest expense Date Aug. 31 Adjusting No. 718 Explanation Ref Debit Credit Balance 600 600

Part B: Three Column Format of Account

No. 722 nsurance expense Date Aug. 31 Adjusting Explanation Ref Debit Credit Balance 900 900 Salaries and Wages expense No. 726 Date Aug. 31 Balance Aug. 31 Adjusting Explanation Ref Debit Credit Balance 51,000 51,400 400 Utilities Expense Date No. 732 Ref Explanation Debit Credit Balance Aug. 31 Balance 9,400

Part C: Adjusted Trial Balance

Part C Maquoketa River Resort, Inc Adjusted Trial Balance 31st August 2019 Debit $ 19,600 $4,000 Credit Cash Accounts Receivable Supplies Prepaid Insurance$5,100 Land Building:s Accumulated Depreciation Building:s Equipment Accumulated Depreciation- Equipment Accounts Pavable Unearned Rent Salaries Pavable Interest Payable 800 $25,000 $ 1,25,000 $ 1,500 $ 26,000 $600 $ 6,500 $ 2,600 400 600

Part C: Adjusted Trial Balance

s 80,000 $1,00,000 9 Mortgage Payable 0 Common Stock 1 Dividends 2 Rent Revenue $5,000 $ 88,800 Depreciation 3 Expense $2,100 4 Repair Expense $3,600 Supplies Expense 2,500 s interest Expense|$ 600 7 Insurance Ex $ 900 8 Salaries Expense$51,400 9 Utilities Expense$9,400 o Totals $ 2,81,000| $2.81,000

Part D: Income Statement

Maquoketa River Resort, Inc Income Statement For the Three Months Ended August 31, 2019 Revenues: Rent revenue Expenses: Depreciation Expense Repair Expense Supplies Expense Interest Expense Insurance Expense Salaries Expense Utilities Expense Total expense Net Income $ 88,800 $ 2,100 $ 3,600 $2,500 600 900 $ 51,400 $ 9,400 S $ 70,500 18,300 (88800 - 70500)

Part D: Statement of Retained Earnings

Retained Earnings Statement For the Three Months Ended August 31, 2019 Retained earninsune1 Retained earnings, June1_ Add: Net income Less: Dividends Retained earnings, August 31 $ 5,000 $ 13,300

Part D: Balance Sheet

Maquoketa River Resort, Inc Balance Sheet As on August 31, 2019 Assets Cash Accounts receivable Supplies Prepaid insurance Land Building:s Less: Accummulated depreciation buildings $ Equipment Less: Accummulated depreciation Equipment $ Total Assets Amounts Amounts $19,600 4,000 800 5,100 $25,000 $1,25,000 1,500$ 1,23,500 $26,000 600 25,400 $ 2,03,400

Part D: Balance Sheet

Liabilities and Stockholders Equity Liabilities Accounts payable Mortgage payable Unearned rent Interest payable Salaries payable Total liabilities Stockholders equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders 6,500 $80,000 2,600 600 400 $ 90,100 $ 1,00,000 $13,300 $ 1,13,300 $ 2,03,400

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