John McRoe opened a tennis resort in June 20--. Most guests register for one week, arriving on Sunday afternoon and returning home the following Saturday afternoon. Guests stay at an adjacent hotel. The tennis resort provides lunch and dinner. Dining and exercise facilities are provided in a building rented by McRoe. A dietitian, masseuse, physical therapist, and athletic trainers are on call to assure the proper combination of diet and exercise. The chart of accounts and transactions for the month of June are provided below. McRoe uses the modified cash basis of accounting.

McRoe Tennis Resort

Chart of Accounts

Assets.....................Revenue

101 Cash....................401 Registration Fees

142 Office Supplies

144 Food Supplies.................Expenses

184 Tennis Facilities.................511 Wages Expense

184.1 Accum. Depr.––Tennis Facilities.........521 Rent Expense

186 Exercise Equipment...............523 Office Supplies Expense

186.1 Accum. Depr.––Exercise Equip. .........524 Food Supplies Expense

........................525 Telephone Expense

Liabilities....................533 Utilities Expense

202 Accounts Payable...............535 Insurance Expense

........................536 Postage Expense

Owner’s Equity...................541 Depr. Exp.––Tennis Facilities

311 John McRoe, Capital................542 Depr. Exp.––Exercise Equip.

312 John McRoe, Drawing

313 Income Summary

June 1 McRoe invested cash in the business, $90,000.

1 Paid for new exercise equipment, $9,000.

2 Deposited registration fees in the bank, $15,000.

2 Paid rent for month of June on building and land, $2,500.

2 Rogers Construction completed work on new tennis courts that cost $70,000. The estimated useful life of the facility is five years, at which time the courts will have to be resurfaced. Arrangements were made to pay the bill in July.

3 Purchased food supplies on account from Au Naturel Foods, $5,000.

5 Purchased office supplies on account from Gordon Office Supplies, $300.

7 Deposited registration fees in the bank, $16,200.

10 Purchased food supplies on account from Au Naturel Foods, $6,200.

10 Paid wages to staff, $500.

14 Deposited registration fees in the bank, $13,500.

16 Purchased food supplies on account from Au Naturel Foods, $4,000.

17 Paid wages to staff, $500.

18 Paid postage, $85.

21 Deposited registration fees in the bank, $15,200.

24 Purchased food supplies on account from Au Naturel Foods, $5,500.

24 Paid wages to staff, $500.

28 Deposited registration fees in the bank, $14,000.

30 Purchased food supplies on account from Au Naturel Foods, $6,000.

30 Paid wages to staff, $500.

30 Paid Au Naturel Foods on account, $28,700.

30 Paid utility bill, $500.

30 Paid telephone bill, $120.

30 McRoe withdrew cash for personal use, $1,500.

REQUIRED

1. Enter the transactions in a combination journal (page 1). Establish special columns for Registration Fees (credit), Wages Expense (debit), and Food Supplies (debit).

2. Prove the combination journal.

3. Post these transactions to a general ledger.

4. Prepare a trial balance as of June 30.