Maquoketa Valley Resort opened for business on June 1 with eight air-conditioned units.
Its trial balance before adjustment on August 31 is presented here..
|
MAQUOKETA VALLEY RESORT
Trial Balance
August 31, 2012
|
|
Debit
|
Credit
|
|
Cash
|
$ 24,600
|
|
|
Prepaid Insurance
|
5,400
|
|
|
Supplies
|
4,300
|
|
|
Land
|
40,000
|
|
|
Buildings
|
132,000
|
|
|
Equipment
|
36,000
|
|
|
Accounts Payable
|
|
$ 6,500
|
|
Unearned Rent Revenue
|
|
6,800
|
|
Mortgage Payable
|
|
120,000
|
|
Common Stock
|
|
100,000
|
|
Dividends
|
5000
|
|
|
Rent Revenue
|
|
80000
|
|
Salaries and Wages Expense
|
53,000
|
|
|
Utilities Expense
|
9,400
|
|
|
Maintenance and Repairs Expense
|
3,600
|
|
|
$313,300
|
$313,300
|
Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies on August 31 shows $700 of supplies on hand.
3. Annual depreciation is $6,600 on buildings and $4,000 on equipment.
4. Unearned rent of $5,000 was earned prior to August 31.
5. Salaries of $600 were unpaid at August 31.
6. Rentals of $1,600 were due from tenants at August 31. (Use Accounts Receivable.)
7. The mortgage interest rate is 9% per year. (The mortgage was taken out August 1.)
Instructions
(a) Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31.
(b) Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.
(c) Prepare an adjusted trial balance on August 31.
(d) Prepare an income statement and a retained earnings statement for the 3 months ended August 31 and a classified balance sheet as of August 31.
(e) Identify which accounts should be closed on August 31.