Unit 4

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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.

MELTON RIVER RESORT
Trial Balance
August 31, 2012
Account Number
   
Debit
 
Credit
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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