Unit 4
Melton River Resort opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is as follows.
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MELTON RIVER RESORT
Trial Balance August 31, 2012 |
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Account Number
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Debit
|
Credit
|
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| 101 | Cash | $ 19,653 | ||||
| 126 | Supplies | 3,486 | ||||
| 130 | Prepaid Insurance | 4,360 | ||||
| 140 | Land | 26,728 | ||||
| 143 | Buildings | 128,418 | ||||
| 149 | Equipment | 28,660 | ||||
| 201 | Accounts Payable | $ 6,663 | ||||
| 209 | Unearned Rent Revenue | 7,286 | ||||
| 275 | Mortgage Payable | 80,000 | ||||
| 301 | Owner’s Capital | 101,922 | ||||
| 306 | Owner’s Drawings | 4,896 | ||||
| 429 | Rent Revenue | 84,113 | ||||
| 622 | Maintenance and Repairs Expense | 3,710 | ||||
| 726 | Salaries and Wages Expense | 50,536 | ||||
| 732 | Utilities Expense | 9,537 | ||||
| $279,984 | $279,984 | |||||
In addition to those accounts listed on the trial balance, the chart of accounts for Melton River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 620 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
| 1. | Insurance expires at the rate of $218 per month. | |
| 2. | A count on August 31 shows $820 of supplies on hand. | |
| 3. | Annual depreciation is $5,608 on buildings and $2,264 on equipment. | |
| 4. | Unearned rent revenue of $4,515 was earned prior to August 31. | |
| 5. | Salaries of $421 were unpaid at August 31. | |
| 6. | Rentals of $4,135 were due from tenants at August 31. (Use Accounts Receivable.) | |
| 7. | The mortgage interest rate is 9% per year. (The mortgage was taken out on August 1.) |
- Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.
- (b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)
- (c) Prepare an adjusted trial balance on August 31.
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