Bob Night’s fishing camp, “The General’s Favorite Fishing Hole,” is in the secon
ID: 2719403 • Letter: B
Question
Bob Night’s fishing camp, “The General’s Favorite Fishing Hole,” is in the second month of operation. The camp is open from April through September, which allows for many college basketball coaches to attend during their off-season. The camp’s attendees arrive on Sunday afternoon and return home the following Saturday afternoon. Each attendee pays a registration fee that includes room and board, the use of fishing boats, and professional instruction in fishing techniques. Based on suggestions from clients, Night plans to expand the facilities and provide additional services. The post-closing trial balance as of April 30, and chart of accounts are provided below.
Account
Acct.
No.
Debit
Balance
Credit
Balance
Cash
101
130,650
Office Supplies
142
100
Food Supplies
144
8,000
Prepaid Insurance
145
7,500
Fishing Boats
181
60,000
Accumulated Depreciation--Fishing Boats
181.1
1,000
Accounts Payable
202
66,500
Wages Payable
219
500
Bob Night, Capital
311
138,250
206,250
206,250
Assets
101 Cash
122 Accounts Receivable
142 Office Supplies
144 Food Supplies
145 Prepaid Insurance
146 Prepaid Subscriptions
161 Land
171 Building
171.1 Accum. Depr.--Buildings
181 Fishing Boats
181.1 Accum. Depr.--Fishing Boats
182 Surround Sound System
182.1 Accum. Depr.--Surround Sound Sys.
183 Big Screen TV
183.1 Accum. Depr.--Big Screen TV
Liabilities
202 Accounts Payable
219 Wages Payable
Owner's Equity
311 Bob Night, Capital
312 Bob Night, Drawing
313 Income Summary
Revenues
401 Registration Fees
404 Vending Revenue
Expenses
511 Wages Expense
512 Advertising Expense
521 Rent Expense
523 Office Supplies Expense
524 Food Supplies Expense
525 Telephone Expense
533 Utilities Expense
535 Insurance Expense
536 Postage Expense
537 Repair Expense
540 Depr. Exp.--Buildings
541 Depr. Exp.--Surround Sound Sys.
542 Depr. Exp.--Fishing Boats
543 Depr. Exp.--Big Screen TV
546 Satellite Programming. Exp.
548 Subscriptions Expense
The following transactions took place during May 2013
May
1 In order to provide snacks for guests on a 24 hour basis, Night signed a contract with Snack Attack. Snack Attack will install vending machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for $200, the estimated commission on sales for May.
2 Night purchased a surround sound system and big screen TV with a Digital Satellite System for the guest lounge. The surround sound system cost $3,600 and has an estimated useful life of 5 years, and no salvage value. The TV cost $8,000 and has an estimated useful life of 8 years, and a salvage value of $800. Night paid cash for both items.
2 Paid for May’s programming on the new Digital Satellite System, $125.
3 Night's office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction in our account with Gordon.
3 Deposited registration fees, $52,700
3 Paid rent for lodge and campgrounds for the month of May, $40,000.
3 In preparation for the purchase of a nearby campground, Night invested an additional $600,000.
4 Paid Gordon Office Supply on account, $400.
4 Purchased the assets of a competing business and paid cash for the following: land $100,000, lodge $530,000 and fishing boats $9,000. The lodge has a remaining useful life of 50 years and a $50,000 salvage value. The boats have remaining lives of 5 years and zero salvage value.
5 Paid May's insurance premium for the new camp, $1,000
5 Purchased food supplies from Acme Super Market on account, $22,950.
5 Purchased office supplies from Gordon Office Supplies on account, $1,200.
7 Night paid $40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited, and Fish Master.
10 Deposited registration fees, $62,750
13 Paid wages to fishing guides, $30,000.
14 A guest because ill and was unable to stay for the entire week. A refund was issued in the amount of $1,000.
17 Deposited registration fees, $63,000.
19 Purchased food supplies from Acme Super Market on account, $18,400.
21 Deposited registration fees, $63,400
23 Paid $2,500 for advertising spots on National Sports Talk Radio
25 Paid repair fee for damaged boat, $ 850.
27 Paid wages to fishing guides, $30,000.
28 Paid $1,800 for advertising spots on billboards in the mid-west.
29 Purchased food supplies from Acme Super Market on account, $14,325.
30 Paid utilities bill, $3,300
30 Paid telephone bill, $1,800.
30 Paid Acme Super Market on account, $47,350.
31 Bob Night withdrew cash for personal use, $7,500.
Adjustment information at the end of May is provided below.
a. Total vending machine sales were $2,300 for the month of May.
b. Straight-line depreciation is used for the 10 boats purchased on April 2nd for $60,000. The useful life for these assets is 5 years and there is no salvage value. A full month's depreciation was taken in April on these boats.
c. Straight line depreciation is used for the 2 boats purchased in May.
d. Straight line depreciation is used to depreciate the surround sound system.
e. Straight line depreciation is used to depreciate the big screen TV.
f. Straight line depreciation is used for the building purchased in May.
g. On April 2nd Night paid $9,000 for insurance during the six-month camping season. May's portion of this premium was used up during this month.
h. Night received his May issues of Fishing Illustrated, Fishing Unlimited, and Fish Master.
i. Office supplies remaining on hand, $150.
j. Food supplies remaining on hand, $5,925.
k. Wages earned, but not yet paid, at the end of May, $6,000.
REQUIRED
1. Enter the above transactions in a general journal. Enter transactions from May 1-4 on page 5, May 5-28 on page 6, and the remaining entries on page 7.
2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general ledger accounts.)
3. Prepare a trial balance on a work sheet.
4. Complete the work sheet.
5. Prepare the income statement.
6. Prepare the statement of owner’s equity
7. Prepare the balance sheet.
8. Journalize the adjusting entries on page 8 of the general journal.
9. Post the adjusting entries to the general ledger.
10. Journalize the closing entries on page 9 of the general journal.
11. Post the closing entries to the general ledger.
12. Prepare a post-closing trial balance.
Account
Acct.
No.
Debit
Balance
Credit
Balance
Cash
101
130,650
Office Supplies
142
100
Food Supplies
144
8,000
Prepaid Insurance
145
7,500
Fishing Boats
181
60,000
Accumulated Depreciation--Fishing Boats
181.1
1,000
Accounts Payable
202
66,500
Wages Payable
219
500
Bob Night, Capital
311
138,250
206,250
206,250
Explanation / Answer
Amount (in $) Date Particulars Debit Credit May-01 Cash 200.00 Vending Revenue 200.00 May-02 Surround Sound System 3600.00 Big Screen TV 8000.00 Cash 11600.00 May-02 Satellite Programming. Exp. 125.00 Cash 125.00 May-03 Accounts Payable 100.00 Office Supplies 100.00 May-03 Cash 52700.00 Registration Fees 52700.00 May-03 Rent Expense 40000.00 Cash 40000.00 May-03 Cash 600000.00 Bob Night, Capital 600000.00 May-04 Office Supplies Expense 400.00 Accounts Payable 400.00 May-04 Land 100000.00 Building 530000.00 Fishing Boats 9000.00 Cash 639000.00 May-05 Insurance Expense 1000.00 Cash 1000.00 May-05 Food Supplies Expense 22950.00 Accounts Payable 22950.00 May-05 Office Supplies Expense 1200.00 Accounts Payable 1200.00 May-07 Subscriptions Expense 120.00 Cash 120.00 May-10 Cash 62750.00 Registration Fees 62750.00 May-13 Wages Expense 30000.00 Cash 30000.00 May-14 Registration Fees 1000.00 Cash 1000.00 May-17 Cash 63000.00 Registration Fees 63000.00 May-19 Food Supplies Expense 18400.00 Accounts Payable 18400.00 May-21 Cash 63400.00 Registration Fees 63400.00 May-23 Advertising Expense 2500.00 Cash 2500.00 May-25 Repair Expense 850.00 Cash 850.00 May-27 Wages Expense 30000.00 Cash 30000.00 May-28 Advertising Expense 1800.00 Cash 1800.00 May-29 Food Supplies Expense 14325.00 Accounts Payable 14325.00 May-30 Utilities Expense 3300.00 Cash 3300.00 May-30 Telephone Expense 1800.00 Cash 1800.00 May-30 Accounts Payable 47350.00 Cash 47350.00 May-31 Bob Night, Drawing 7500.00 Cash 7500.00 May-31 Accounts Receivable 30.00 Vending Revenue 30.00 May-31 Depr. Exp.--Fishing Boats 1150.00 Depr. Exp.--Surround Sound Sys. 60.00 Depr. Exp.--Big Screen TV 75.00 Depr. Exp.--Buildings 800.00 Accum. Depr.--Buildings 800.00 Accum. Depr.--Fishing Boats 1150.00 Accum. Depr.--Surround Sound Sys. 60.00 Accum. Depr.--Big Screen TV 75.00 May-31 Insurance Expense 1500.00 Prepaid Insurance 1500.00 Trial Balance as on 31 May Account Acct. No. Debit Balance Credit Balance Cash 101 1,54,755 Accounts Receivable 122 30 Office Supplies 142 150 Food Supplies 144 63,675 Prepaid Insurance 145 6,000 Land 161 1,00,000 Building 171 5,30,000 Accum. Depr.--Buildings 171.1 800 Fishing Boats 181 69,000 Accumulated Depreciation--Fishing Boats 181.1 2,150 Surround Sound System 182 3600 Accum. Depr.--Surround Sound Sys. 182.1 60 Big Screen TV 183 8000 Accum. Depr.--Big Screen TV 183.1 75 Accounts Payable 202 76,325 Wages Payable 219 500 Bob Night, Capital 311 7,38,250 Bob Night, Drawing 312 7500 Income Summary 313 1,24,550 9,42,710 9,42,710
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.