A. ABC Hotels operates in the tourism industry. Assume that the trial-balance of ABC hotels, as...

 

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A. "ABC Hotels" operates in the tourism industry. Assume that the trial-balance of "ABC hotels", as of December 31,2020 is: Cash......... Accounts Receivable............ Allowance for Doubtful Accounts. Prepaid Insurance...... Land ........... ABC Hotels Trial Balance December 31, 2020 Buildings Accumulated Depreciation-Buildings........ Equipment .......... Accumulated Depreciation-Equipment. Share Capital.............. Retained Earnings........ Revenues from accommodation.............. Revenues from renting hotel facilities......... Revenues from restaurants ........ Utilities Expense......... Salaries and Wages Expense.... Maintenance and Repairs Expense..... Totals ................... …………………… Debit €7,500 6,500 4,500 175,000 60,000 75,000 27,000 40,000 12,000 €407,500 Credit €550 19,200 35,000 200,000 41,000 100,000 2,950 8,800 €407,500 Required: 1. Based on the trial-balance and the information provided below, prepare adjusting entries and post them to the general ledger. (20%) The estimated useful life of the buildings is 40 years with insignificant residual value. The firm implements the straight-line depreciation method. b. The depreciation rate for equipment is 15% per year. The salvage value of the equipment is zero and the firm uses the straight-line depreciation method. During the year expired an insurance policy of €1,750. d. The amount of "Revenues from renting hotel facilities" present the amount received for 10 months for renting sporting facilities of the hotel to a local sporting club. The rents for November and December have not yet been received. e. It is estimated that 10% of the accounts receivable will not be collected. f. The expenses for salaries and wages for months November and December amount to €1,800. This amount will be paid during the fiscal period of 2021. g. The firm has received in advance from customers the amount of €4,450. The amount refers to accommodation services that will be provided to customers during the summer of 2021. The amount received was recorded as a revenue of the closing year. 2. Prepare adjusted trial balance. (2%) 3. Prepare closing entries and post them to the ledger. (3%) Additional information a. b. c. Assume that the amounts presented in the trial balance are already posted in the general ledger accounts. Firm's tax rate is 20%. The fiscal year of "ABC Hotels" commences on January 1 and ends on December 31 of each year. B. Explain relation between expenses recognition and assets recognition. (Word limit 500). (5%) A. "ABC Hotels" operates in the tourism industry. Assume that the trial-balance of "ABC hotels", as of December 31,2020 is: Cash......... Accounts Receivable............ Allowance for Doubtful Accounts. Prepaid Insurance...... Land ........... ABC Hotels Trial Balance December 31, 2020 Buildings Accumulated Depreciation-Buildings........ Equipment .......... Accumulated Depreciation-Equipment. Share Capital.............. Retained Earnings........ Revenues from accommodation.............. Revenues from renting hotel facilities......... Revenues from restaurants ........ Utilities Expense......... Salaries and Wages Expense.... Maintenance and Repairs Expense..... Totals ................... …………………… Debit €7,500 6,500 4,500 175,000 60,000 75,000 27,000 40,000 12,000 €407,500 Credit €550 19,200 35,000 200,000 41,000 100,000 2,950 8,800 €407,500 Required: 1. Based on the trial-balance and the information provided below, prepare adjusting entries and post them to the general ledger. (20%) The estimated useful life of the buildings is 40 years with insignificant residual value. The firm implements the straight-line depreciation method. b. The depreciation rate for equipment is 15% per year. The salvage value of the equipment is zero and the firm uses the straight-line depreciation method. During the year expired an insurance policy of €1,750. d. The amount of "Revenues from renting hotel facilities" present the amount received for 10 months for renting sporting facilities of the hotel to a local sporting club. The rents for November and December have not yet been received. e. It is estimated that 10% of the accounts receivable will not be collected. f. The expenses for salaries and wages for months November and December amount to €1,800. This amount will be paid during the fiscal period of 2021. g. The firm has received in advance from customers the amount of €4,450. The amount refers to accommodation services that will be provided to customers during the summer of 2021. The amount received was recorded as a revenue of the closing year. 2. Prepare adjusted trial balance. (2%) 3. Prepare closing entries and post them to the ledger. (3%) Additional information a. b. c. Assume that the amounts presented in the trial balance are already posted in the general ledger accounts. Firm's tax rate is 20%. The fiscal year of "ABC Hotels" commences on January 1 and ends on December 31 of each year. B. Explain relation between expenses recognition and assets recognition. (Word limit 500). (5%)

Answer rating: 100% (QA)

Based on the provided trial balance and additional information lets prepare the adjusting entries and post them to the general ledger a Depreciation e... View the full answer