Question: Death Valley Resort opened for business on June 1 with

Death Valley Resort opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is presented here.

Other data:
1. Insurance expires at the rate of $500 per month.
2. A count of supplies on August 31 shows $900 of supplies on hand.
3. Annual depreciation is $6,600 on buildings and $4,000 on equipment.
4. Unearned rent of $4,000 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 6% per year. (The mortgage was taken out August 1.)
(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 August31.
View Solution:

Sale on SolutionInn
  • CreatedApril 07, 2014
  • Files Included
Post your question