Exercises 133 E3-1(LO3) (Adjusting Entries) Greco Resort opened for business onl

Question

Exercises 133 E3-1(LO3) (Adjusting Entries) Greco Resort opened for business onlusel with eighe areendisaederatstrial balance on August 31 is as follows Debit s 19,600 Prepaid Insurance Buildings 5 4,500 Accounts Payable Uneamed Rent Revea Mortgage Payable Common Sock Retained Eamings Dividends Rent Revenue Salaries and Wages Expense Utilities Expenses Maintemance and Repairs Expense 9,000 5,000 ry, 44.800 9,200 245,300 245,300 Other data 1. The balance in prepaid insurance is a one-year premium paid on June 1,2017 2 An inventory count on August 31 shows $450 of supplies on hand. 3. Annual depreciat tion rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost. Unearned Rent Revenue of $3,800 was earned prior to August 31. 5. Salaries of $375 were unpaid at August 6 Rentals of $800 were due from tenants at August 31 7. The mortgage interest rate is 8% per year. 31. Instructions (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

Explanation / Answer

Greco Resort Trial Balance Adjustment Adjusted Trial Balance At August 31, 2017 Accounts Titles Debit Credit Debit Credit Debit Credit Cash $       19,600 $                 800 $        20,400 Accounts Receivable $               -   Prepaid Insurance $          4,500 $         1,125 $          3,375 Supplies $          2,600 $         2,150 $             450 Land $       20,000 $        20,000 Building $    120,000 $       120,000 Accumulated Dep. - Building $         1,080 $          1,080 Equipment $       16,000 $        16,000 Accumulated Dep. - Equipment $             360 $            360 Accounts Payable $            4,500 $          4,500 Unearned Revenue $            4,600 $              3,800 $            800 Accrued Salaries and wages Expenses $             375 $            375 Interest Expenses Payable $         1,200 $          1,200 Mortgage Payable $         60,000 $        60,000 Common Stock $         91,000 $        91,000 Retained Earnings $            9,000 $          9,000 Dividends $          5,000 $          5,000 Rent Revenue $         76,200 $         4,600 $        80,800 Salaries and wages Expenses $       44,800 $                 375 $        45,175 Utility Expenses $          9,200 $          9,200 Maintenance & Repairs Expenses $          3,600 $          3,600 Insurance Expenses $              1,125 $          1,125 Depreciation Expenses $              1,440 $          1,440 Supplies Expenses $              2,150 $          2,150 Interest Expenses $              1,200 $          1,200 Total $ 245,300 $    245,300 $         10,890 $    10,890 $     249,115 $    249,115 Date Accounts Titles & Explanation Debit Credit 1 Insurance Expenses $          1,125 Prepaid Insurance $            1,125 2 Supplies Expenses $          2,150 Supplies $            2,150 3 Depreciation Expenses $          1,440 Accumulated Dep. - Building $            1,080 Accumulated Dep. - Equipment $                360 4 Unearned Revenue $          3,800 Rent Revenue $            3,800 5 Salaries and wages Expenses $             375 Accrued Salaries and wages Expenses $                375 6 Accounts Receivable $             800 Revenue $                800 7 Interest Expenses $          1,200 Interest Expenses Payable $            1,200

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