Question

Snow Lake Resort presents its un-adjusted trial balance below. Snow Lake Resort Trial Balance December 31, 2018 Debit Credit Cash $ 21,000.00 Accounts Receivable $ 16,000.00 Allowance for Doubtful Accounts $ 3,000.00 Inventory $ 23,000.00 Prepaid Insurance $ 8,000.00 Equipment $ 23,000.00 Accumulated Depreciation - Equipment $ 11,000.00 Cars $ 45,000.00 Accumulated Depreciation - Cars $ 24,000.00 Building $ 225,000.00 Accumulated Depreciation - Building $ 175,000.00 Accounts Payable $ 9,000.00 Notes Payable $ 5,000.00 Common Stock $ 60,000.00 Retained Earnings $ 38,850.00 Service Revenue $ 95,000.00 Salaries Expense $ 31,000.00 Utility Expense $ 2,100.00 Office Expense $ 3,000.00 Rent Expense $ 22,500.00 Advertising Expense $ 1,250.00 Total $ 420,850.00 $ 420,850.00 $18,000.00

Answer 1

1. Adjusting Entries -

Snow Lake Resort Adjusting Entries Date Accounts Title Debit Credit 1 Service Revenue $ 12,000 Unearned Service Revenue $ 12,000 (Being Advance revenue transfer to unearned revenue) 2 Accounts Receivable $ 16,000 Service Revenue (Being Service provided and billed) $ 16,000 3 Bad debts $ 6,000 Allowance for doubtful Accounts (Being Bad debt incurred) $ 6,000 4 Insurance Expense $ 2,500 Prepaid Insurance (Being Insurance Expired) $ 2,500 6 Depreciation Expense - Equipmen $1,000 Accumulated Depreciation - Equipment (Being Depreciation Expense incurred) $ 1,000 7 Depreciation Expense - Cars $ 6,000 Accumulated Depreciation - Cars (Being Depreciation Expense incurred) $ 6,000 8 Depreciation Expense - Building $ 10,000 Accumulated Depreciation - Building (Being Depreciation Expense incurred) $ 10,000 9 100 Interest Expense $ Interest Payable (Being Interest expense incurred) $ 100 10 Prepaid Rent $ 4,500 Rent Expense (Being Rent prepaid transferred) $ 4,500 11 Salaries Expense $ 2,000 Salaries Payable (Being Salaries Expense incurred) $ 2,000

2. Adjusted Trial Balance -

Credit $ 9,000 $ 12,000 $ 30,000 Snow Lake Resort Adjusted Trial Balance Accounts Title Debit Cash $ 21,000 Accounts Receivable $ 32,000 Allowance for doubtful accounts Inventory $ 23,000 Prepaid Insurance $ 5,500 Prepaid Rent $ 4,500 Equipment $ 23,000 Accumulated Depreciation - Equipment Cars $ 45,000 Accumulated Depreciation - Cars Building $ 225,000 Accumulated Depreciation - Building Accounts Payable Unearned Service Revenue Interest Payable Salaries Payable Notes Payable Common Stock Retained Earnings Service Revenue Salaries Expense $ 33,000 Utilities Expense $ 2,100 Office Expense $ 3,000 Rent Expense $ 18,000 Bad debts $ 6,000 Insurance Expense $ 2,500 Depreciation Expense - Equipment $ 1,000 Depreciation Expense - Cars $ 6,000 Depreciation Expense - Building $ 10,000 Interest Expense $ 100 Advertising Expense $ 1,250 $ 185,000 $ 9,000 $ 12,000 $ 100 $ 2,000 $ 5,000 $ 60,000 $ 38,850 $ 99,000 Total $461,950 $461,950

3. Income Statement -

Snow Lake Resort Income Statement For the Period Ended December 31, 2018 Service Revenue $ 99,000 Expenses: Salaries Expense Utilities Expense Office Expense Rent Expense Bad debts Insurance Expense Depreciation Expense - Equipment Depreciation Expense - Cars Depreciation Expense - Building Interest Expense Advertising Expense $ 33,000 $ 2,100 $ 3,000 $ 18,000 $ 6,000 $ 2,500 $ 1,000 $ 6,000 $ 10,000 $ 100 $ 1,250 $ 82,950 | Net Income $ 16,050

4. Statement of Retained Earnings -

Snow Lake Resort Statement of Retained Earnings For the Period Ended December 31, 2018 Retained Earnings January 1, 2018 Add: Net Income $ 16,050 $ 38,850 $ 16,050 $ 54,900 Retained Earnings December 31, 2018

5. Balance Sheet -

Snow Lake Resort Balance Sheet As at December 31, 2018 Assets Current Assets: Cash $ 21,000 Accounts Receivable $ 32,000 Allowance for doubtful accounts $ (9,000) $ 23,000 Inventory $ 23,000 Prepaid Insurance $ 5,500 Prepaid Rent $ 4,500 Total Current Assets $ 77,000 Equipment $ 23,000 Accumulated Depreciation - Equipment $ (12,000) $ 11,000 Cars $ 45,000 Accumulated Depreciation - Cars $ (30,000) $ 15,000 Building $ 225,000 Accumulated Depreciation - Building $(185,000) $ 40,000 Total Assets $ 143,000 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable Unearned Service Revenue Interest Payable Salaries Payable Total Current Liabilities $ 9,000 $ 12,000 $ 100 $ 2,000 $ 23,100 Notes Payable $ 5,000 Total Liabilities $ 28,100 Stockholder's Equity: Common Stock Retained Earnings Total Stockholder's Equity $ 60,000 $ 54,900 $ 114,900 Total Liabilities and Stockholder's Equity $ 143,000