Question

1.

Gonzalez Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows Gonzalez Resort Trial Balance August 31, 2017 Debit Credit $1,960 Prepaid Insurance Supplıes Buildıngs Equipment 2,000 12,000 1,600 Accounts $450 Payable Unearned Rent Revenue Mortgage Payable Common Stock 6,000 9,100 890 Retaned Earnıngs Dividends 500 4,48 920 7,620 Revenue Salaries and Wages Expense Utilities Expense Maintenance and Repairs $24,520 24,520 Other data: 1 The balance in prepaid insurance is a one-year premium paid on June 1, 2017 2 An inventory count on August 31 shows $45 of supplies on hand. Annual depreciation rates are cottages (10%) and furniture (15%). Salvage value is estimated to be 10% of cost. 4 Unearned Rent Revenue of $380 was earned prior to August 31 s. Salaries of $38 were unpaid at August 31 6 Rentals of $80 were due from tenants at August 31 7. The mortgage interest rate is 6% per year Instructions (a) Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31 (b) Prepare an adjusted trial balance on August 31

Answer 1

1
		Debit	Credit
31-Aug	Insurance Expense	110		=440/12*3
	Prepaid Insurance		110
31-Aug	Supplies Expense	215		=260-45
	Supplies		215
Aug 31 (a)	Depreciation Expense	270		=12000*(1-10%)*10%*3/12
	Accumulated Depreciation-Building		270
Aug 31 (b)	Depreciation Expense	54		=1600*(1-10%)*15%*3/12
	Accumulated Depreciation-Equipment		54
31-Aug	Unearned Rent Revenue	380
	Rent Revenue		380
31-Aug	Salaries and Wages Expenses	38
	Salaries and Wages Payable		38
31-Aug	Accounts Receivable	80
	Rent Revenue		80
31-Aug	Interest Expense	90		=6000*6%*3/12
	Interest Payable		90
2
	Adjusted Trial Balance
	August 31, 2017
		Debit	Credit
	Cash	1960
	Accounts Receivable	80
	Prepaid Insurance	330
	Supplies	45
	Land	2000
	Buildings	12000
	Accumulated Depreciation-Building		270
	Equipment	1600
	Accumulated Depreciation-Equipment		54
	Accounts Payable		450
	Unearned Rent Revenue		80
	Salaries Payable		38
	Interest Payable		90
	Mortgage Payable		6000
	Common Stock		9100
	Retained Earnings		890
	Dividends	500
	Rent Revenue		8080
	Salaries and wages Expense	4518
	Utilities Expense	920
	Maintenance and Repair Expense	360
	Insurance Expense	110
	Supplies Expense	215
	Depreciation Expense	324
	Interest Expense	90
		25052	25052