Question

Splashtown, Ltd, an amusement park, generates revenue from ticket sales and from renting booths to food and souvenir vendors. It has a calendar financial year but prepares adjusting entries, closing entries, and financial statements quarterly. At the end of the year, the company also prepares annual financial statements. You may assume no errors were made journalising and posting transactions. The unadjusted trial balance at June 30, 2017, the end of the second quarter, follows: Cash Accounts Receivable Prepaid Rent Supplies Equipment Accumulated Depreciation, Equipment Accounts Payable Interest Payable Wages Payable Customer Prepayments Bank Loan Payable Share Capital Retained Earnings Admissions Revenue Vendor Rental Revenue Other Operating Expenses Interest Expense Depreciation Expense Wages Expense $14,400 1,000 9,900 1,200 48,000 $12,000 1,200 150 10,000 28,000 9,630 37,920 6,200 11,600 19,000 $105,10 $105,.100

Answer 1

1. Adjusted Journal Entries
No.	Particulars	Debit ($)	Credit ($)
1	Other opearting expense	3300
	Prapaid Rent		3300
	($ 9900/9 months)*3 months
2	Supplies	1000
	Other opearting expense		1000
3	Depreciation expense	1500
	Accumated Depreciation		1500
	($ 6000/12)*3 months
4	Admission revenue	5200
	Customer Prepayments		5200
5	Wages Expense	1440
	Wages Payable		1440
	($ 1800/5 days)*4 days
6	Account Receivable	2800
	Vendor Rental Revenue		2800
	(10% of $ 28,000)
7	Interest Expense	150
	Interest Payable		150
	($ 10,000*6*(3/12 months)
2	Interest is requoired to be paid semi-anually on January 1 and July 1.
	Splashtown ltd, passes closing and adjusting entries quarterly.
	So, Company had booked interest for quarter 1 amounting to $ 150 but not paid because it would be paid on July 1.
	And company had not booked interest for quarter 2. So, interest payable is outstanding $ 150 on unadjusted trail balance on June 30, 2017.
	Secondly, Company has not booked intetest expense for quarter 2 as per unadjusted trail balance. So, interest expense is nil on unadjusted trail balance.
3	Statement of Comprehensive Income for quarter ending June 30, 2017
			($)	($)
	Revenues
	Admissions Revenue (37920- 5200)		32,720
	Vendor Rental Revenue (6200 + 2800)		9,000
	Total Revenues			41,720
	Expenses
	Other Opearting Expense (11600+3300-1000)		13,900
	Interest Expense		150
	Depreciation expense		1,500
	Wages Expense (19000+1440)		20,440
	Total Expenses			35,990
	Net Income			5,730
	Asset Section of Balance Sheet as on June 30, 2017
	Assets		($)
	Cash		14400
	Account Receivable (1000+2800)		3,800
	Prepaid Rent (9900-3300)		6,600
	Supplies (1200+1000)		2,200
	Equipment		48,000
	Total Assets		75,000
	Liabilities		($)
	Accumated Depreciation (12000+1500)		13,500
	Accounts payable		1,200
	Interest Payable (150+150)		300
	Wages payable		1,440
	Customer Prepayments		5,200
	Bank Loan Payable		10,000
	Share Capital		28,000
	Retained earnings (9630+5730)		15,360
	Total Liabilities		75,000