UHURA RESORT TRIAL BALANCE AUGUST 31, 2012
Debit Credit Cash $ 19,600 Prepaid Insurance 4,500 Supplies 2,600 Land 20,000 Buildings 120,000 Equipment 16,000 Accounts Payable $ 4,500 Unearned Rent Revenue 4,600 Mortgage Payable 50,000 Common Stock 100,000 Dividends 5,000 Rent Revenue 86,200 Salaries and Wages Expense 44,800 Utilities Expenses 9,200 Maintenance and Repairs Expense 3,600 $245,300 $245,300 Other data:
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2012.
2. An inventory count on August 31 shows $650 of supplies on hand.
3. Annual depreciation rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of $3,800 was earned prior to August 3
5. Salaries of $375 were unpaid at August 3
6. Rentals of $800 were due from tenants at August 3
7. The mortgage interest rate is 8% per year.
(a)Journalize the adjusting entries on August 31 for the 3-month period June 1-August 3
1. (Omit explanations.)
(b) Prepare an adjusted trial balance on August 31. 5 5Supplies Accounts Receivable Beg. Bal. 800 10 / 31 470 10 / 17 2,100 10 /31 1,650 Salaries and Wages Expense Salaries and Wages Payable 10 /15 800 10 /31 600 10 /31 600 Unearned Service Revenue Supplies Expense 10 /31 400 10 /20 650 10 /31 470 Service Revenue 10 /17 2,100 10 /31 1,650 10 /31 400
Instructions
From an analysis of the T-accounts, reconstruct
(a) the October transaction entries, and
(b) the adjusting journal entries that were made on October 31, 2012. Prepare explanations for each journal entry.