Question

Crestwood Gold Club, Inc. Work Sheet 31-Dec-13 Presented below is the partially adjusted trial balance of the Crestwood Golf Club, Inc. as of December 31, 2013. The books are closed annually on December 31st. "Requirement #2" Additional Adjusting Entries Debit Credit Completely Adjusted Trial Balance Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Prepaid Insurance Land Buildings Accumluated Depreciation - Bldg. Equipment Accumulated Depreciation - Equip. Long-term Investments Income Taxes Payable Note Payable - 2 year term, 10% interest rate Bonds Payable-10 year term, 5% stated rate Premium on Bonds Payable Fair value adjustment - Bonds Payable Common Stock - 2000 shares - no par Retained Earnings Accumulated Other Comprehensive Income Members' Dues Revenue Greens Fee Revenue Cart Rental Revenue Utilities Expense Salaries and Wages Expense Maintenance and Repairs Expense Depreciation Expense Investment Income Income Tax Expense Partially adjusted Trial Balance Debit Credit 15,000 13,000 $ 1,100 9,000 533,000 220,000 38,400 150,000 70,000 23.000 20,000 100,000 200,000 10,000 2,000 400,000 78,000 2,000 200,000 5,900 17,600 54,000 80,000 14,000 11,500 1,500 20,000 Totals $ 1,144,500 $ 1,144,500

Answer 1

CRESTWOOD GOLF CLUB INC.,
Adjusting Entries for the year ending December 31,2013
Date	Account Title	Debit	Credit
12/31/2018	Interest Expense	$833
	Interest on Notes Payable		$833
12/31/2018	Bad Debt Expenses	$460
	Allowance for Doubtful Debts		$460
12/31/2018	Other Comprehensive Income	$1,000
	Accumulated Other Comprehensive Income		$1,000
12/31/2018	Fair Value Adjustment	$1,000
	Accumulated Other Comprehensive Income		$1,000
	CRESTWOOD GOLF CLUB INC.,
		Partially Adjusted		Additional		Completely Adjusted
		Trial Balance		Adjusting Entries		Trial Balance
		Debit	Credit	Debit	Credit	Debit	Credit
	Cash	$15,000				$15,000
	Accounts Receivable	$13,000				$13,000
	Allowance for Doubtful Debts		$1,100		$460		$1,560
	Prepaid Insurance	$9,000				$9,000
	Land	$533,000				$533,000
	Buildings	$220,000				$220,000
	Accumulated Depreciation - Bldg.		$38,400				$38,400
	Equipment	$150,000				$150,000
	Accumulated Depreciation - Equip.		$70,000				$70,000
	Long-Term Investment	$23,000				$23,000
	Income Tax Payable		$20,000				$20,000
	Interest Payable				$833		$833
	Notes Payable - 2 year term 10% interest rate		$100,000				$100,000
	Bonds Payable - 10 year term 5% stated rate		$200,000				$200,000
	Premium on Bonds Payable		$10,000				$10,000
	Fair Value Adjustment - Bonds Payable	$2,000			$1,000	$1,000
	Common Stock - 2000 share no par		$400,000				$400,000
	Retained Earnings		$78,000				$78,000
	Accumulated Other Comprehensive Income		$2,000	$1,000			$1,000
	Members' Dues Revenue		$200,000				$200,000
	Green Fee Revenue		$5,900				$5,900
	Car Rental Revenue		$17,600				$17,600
	Utilities Expense	$54,000				$54,000
	Salaries and Wages Expense	$80,000				$80,000
	Maintenance and Repairs Expense	$14,000				$14,000
	Bad Debt Expense			$460		$460
	Depreciation Expense	$11,500				$11,500
	Interest Expense			$833		$833
	Investment Income		$1,500			$0	$1,500
	Income Tax Expense	$20,000				$20,000
	Totals	$1,144,500	$1,144,500	$2,293	$2,293	$1,144,793	$1,144,793
	CRESTWOOD GOLF CLUB INC.,
	Comprehensive Income Statement
	For the year ended December 31,2013
	Revenues
	Members' Dues Revenue	$200,000
	Green Fee Revenue	$5,900
	Car Rental Revenue	$17,600
	Total Revenue		$223,500
	Expenses
	Utilities Expense	($54,000)
	Salaries and Wages Expense	($80,000)
	Maintenance and Repairs Expense	($14,000)
	Bad Debt Expense	($460)
	Depreciation Expense	($11,500)
	Interest Expense	($833)
	Total Expenses		($160,793)
	Income from Continuing Operations before Tax		$62,707
	Income Tax Expense		($20,000)
	Income from Continuing Operations		$42,707
	Other Comprehensive Income Adjustments
	Investment Income	$1,500
	Other Comprehensive Income on Fair Value Adjustments of Bonds	$1,000
Total Other Comprehensive Income Adjustments		$2,500
Comprehensive Income		$45,207
CRESTWOOD GOLF CLUB INC.,
Statement of Retained Earnings
For the year ended December 31,2013
Beginning Balance , 1/1/2013		$78,000
Add:
Comprehensive Income		$45,207
Ending Balance , 12/31/2013		$123,207
CRESTWOOD GOLF CLUB INC.,
Statement of Financial Poistion
For the year ended December 31,2013
Assets
Current Assets
Cash	$15,000
Accounts Receivable	$13,000
Allowance for Doubtful Debts	($1,560)
Prepaid Insurance	$9,000
Total Current Assets		$35,440
Non-Current Assets
Land	$533,000
Buildings	$220,000
Accumulated Depreciation - Bldg.	($38,400)
Equipment	$150,000
Accumulated Depreciation - Equip.	($70,000)
Total Non-Current Assets		$794,600
Long-Term Investment		$23,000
Total Assets		$853,040
Liabilities
Current Liabilities
Income Tax Payable	$20,000
Interest Payable	$833
Total Current Liabilities		$20,833
Non-Current Liabilities
Notes Payable - 2 year term 10% interest rate	$100,000
Bonds Payable - 10 year term 5% stated rate	$200,000
Premium on Bonds Payable	$10,000
Fair Value Adjustment - Bonds Payable	($1,000)
Total Non-Current Liabilities		$309,000
Shareholders Equity
Common Stock - 2000 share no par	$400,000
Retained Earnings	$123,207
Total Shareholders Equity		$523,207
Total Liabilities and Shareholders Equity		$853,040
Working Notes
Computation of Allowance for Doubtful Debts & Bad Debt Expenses
Balance of Accounts Receivable	$13,000
Allowance for Doubtful Debts	12%
Allowance for Doubtful Debts	$1,560
Allowance for Doubtful Debts	$1,560
Allowance for Doubful Debts as per Trial Bal.	$1,100
Bad Debt Expenses	$460
Computation of Interest on Notes Payable
Balance of Notes Payable	$100,000
Rate of Interest	10%
Annual Interest	$10,000
Interest for December (12/1/13 to 12/31/13)	$833
Computation of Fair Value Adjustments to Bonds Payable
Bonds Payable	$200,000
Premium on Bonds Payable	$10,000
Fair Value Adjustment as per Trial Bal.	($2,000)
Carrying Value of Bonds	$208,000
Fair Value of Bonds	$209,000
Carrying Value of Bonds	$208,000
Increase in Fair Value of Bonds Payable	$1,000
Since, the fair value of the Bonds payable has increased,the adjustment would be charged to the Comprehensive
Income Statement as an expense.
	Treatment of Accumulated Comprehensive Income
	Balance as per Trial Balance	$2,000
	Transferred to Income Statement as Expense	($1,000)
	Adjusted against Fair Value Adjustment Bal.	($1,000)
	Net Balance	$0