P3-2A Lazy River Resort Ltd. opened for business on June 1, 2017. Its trial bala
ID: 2520883 • Letter: P
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P3-2A Lazy River Resort Ltd. opened for business on June 1, 2017. Its trial balance before adjustment on August 31 is as follows. LAZY RIVER RESORT LTD. Trial Balance August 31, 2017 Account Number 101 126 130 140 143 157 201 Debit 19,600 6,000 25,000 26,000 Cash Prepaid Insurance Land Accounts Payable Unearned Rent Revenue Mortgage Payable Share Capital -Ordinary Dividends Rent Revenue Maintenance and Repairs Expense Salaries and Wages Expense Utilities Expense 6,500 7,400 275 311 332 429 622 100,000 3,600 80,000 9,400 273,900 273,900 In addition to those accounts listed on the trial balance, the chart of accounts for Lazy River Resort Ltd. also contains the following accounts and account nmbers No. 112 Accounts Recelvable, No. 144 Accumulated Depreciation-Buildings, No. 158 Accumu lated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, Na. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Insurance expires at the rate of 400 per month. 2. A count on August 31 shows 900 of supplies on hand. 3. Annual depreciation is 4,500 on buildings and 2,400 on equipment 4. Unearned rent revenue of 4,100 should be recorded as rent revenue prior to August 31 5. Salaries of 400 were unpaid at August 31.Explanation / Answer
Adjusting Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Aug Insurance Expense 400.00 Prepaid Insurance 400.00 (To record the insurance expense) 31-Aug Supplies Expense 2,400.00 Supplies 2,400.00 (To record the supplies expense) 31-Aug Depreciation Expense 6,900.00 Accumulated Depreciation - Building 4,500.00 Accumulated Depreciation - Equipment 2,400.00 (To record the depreciation expense) 31-Aug Unearned Rent Revenue 4,100.00 Rent Revenue 4,100.00 (To record the Rent Revenue) 31-Aug Salaries & Wages Expense 400.00 Salaries & Wages Payable 400.00 (To record the salaries due) 31-Aug Accounts Receivable 3,700.00 Rent Revenue 3,700.00 (To record the Rent Revenue due) 31-Aug Interest Expense 600.00 Interest Payable 600.00 (To record the interest expense) LAZY RIVER RESORT LTD. Adjusted Trial Balance Aug 31, 2017 Dr. Amt Cr. Amt. Cash 19,600.00 Accounts Receivable 3,700.00 Supplies 900.00 Prepaid Insurance 5,600.00 Land 25,000.00 Buildings 125,000.00 Accumulated Depreciation - Building 4,500.00 Equipment 26,000.00 Accumulated Depreciation - Equipment 2,400.00 Accounts Payable 6,500.00 Salaries and Wages Payable 400.00 Interest Payable 600.00 Unearned Rent Revenue 3,300.00 Mortgage Payable 80,000.00 Share Capital - Ordinary 100,000.00 Dividends 5,000.00 Rent Revenue 87,800.00 Maintenance & Repair Expense 3,600.00 Salaries and Wages Expense 51,400.00 Utilities Expense 9,400.00 Insurance Expense 400.00 Supplies Expense 2,400.00 Depreciation Expense 6,900.00 Interest Expense 600.00 Total 285,500.00 285,500.00 - LAZY RIVER RESORT LTD. Income Statement For the Month Ended Aug 31, 2017 Revenue Rent Revenue 87,800.00 Expense Maintenance & Repair Expense 3,600.00 Salaries and Wages Expense 51,400.00 Utilities Expense 9,400.00 Insurance Expense 400.00 Supplies Expense 2,400.00 Depreciation Expense 6,900.00 Interest Expense 600.00 74,700.00 Net Income 13,100.00 LAZY RIVER RESORT LTD. Statement of Retained Earnings For the Month Ended Aug 31, 2017 Beginning Balance - Net Income 13,100.00 Sub-total 13,100.00 Dividends (5,000.00) Ending Balance - Aug 31, 2017 8,100.00 LAZY RIVER RESORT LTD. Balance Sheet For the Month Ended Aug 31, 2017 Assets Current assets Cash 19,600.00 Accounts Receivable 3,700.00 Supplies 900.00 Prepaid Insurance 5,600.00 29,800.00 Property Palant & Equipment Land 25,000.00 Buildings 125,000.00 Accumulated Depreciation - Building (4,500.00) 120,500.00 Equipment 26,000.00 Accumulated Depreciation - Equipment (2,400.00) 23,600.00 169,100.00 Total Assets 198,900.00 Liabilities & Stockholders' Equity Liabilities Current Liabilities Accounts Payable 6,500.00 Salaries and Wages Payable 400.00 Interest Payable 600.00 Unearned Rent Revenue 3,300.00 10,800.00 Long Term Liabilities Mortgage Payable 80,000.00 Total Liabilities 90,800.00 Stockholders' Equity Share Capital - Ordinary 100,000.00 Retained Earnings 8,100.00 Total Stockholders' Equity 108,100.00 Total Liabilities & Stockholders' Equity 198,900.00
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