Greco Resort opened for business on June 1 with eight

Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.

GRECO RESORT
TRIAL BALANCE
AUGUST 31, 2014

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        60,000
Common Stock                91,000
Retained Earnings        9,000
Dividends         5,000
Rent Revenue                76,200
Salaries and Wages Expense44,800
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 $450 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 31.
5. Salaries of $375 were unpaid at August 31.
6. Rentals of $800 were due from tenants at August 31.
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 31. (Omit explanations.)

(b) Prepare an adjusted trial balance on August 31.

Here’s the SOLUTION

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