P3-9 (Adjusting and Closing) Presented below is the trial balance of the Crestwo
ID: 2420402 • Letter: P
Question
P3-9 (Adjusting and Closing) Presented below is the trial balance of the Crestwood Golf Club, Inc. as of
December 31. The books are closed annually on December 31.
CRESTWOOD GOLF CLUB, INC.
TRIAL BALANCE
DECEMBER 31
Debit Credit
Cash 15,000
Accounts Receivable 13,000
Allowance for Doubtful Accounts 1,100
Prepaid Insurance 9,000
Land 350,000
Buildings 120,000
Accumulated Depreciation—Buildings 38,400
Equipment 150,000
Accumulated Depreciation—Equipment 70,000
Common Stock 400,000
Retained Earnings 82,000
Dues Revenue 200,000
Green Fees Revenue 5,900
Rent Revenue 17,600
Utilities Expenses 54,000
Salaries and Wages Expense 80,000
Maintenance and Repairs Expense 24,000
$815,000 $815,000
Instructions
(a) Enter the balances in ledger accounts. Allow five lines for each account.
(b) From the trial balance and the information given below, prepare annual adjusting entries and post
to the ledger accounts. (Omit explanations.)
(1) The buildings have an estimated life of 30 years with no salvage value (straight-line method).
(2) The equipment is depreciated at 10% per year.
(3) Insurance expired during the year $3,500.
(4) The rent revenue represents the amount received for 11 months for dining facilities. The December
rent has not yet been received.
(5) It is estimated that 12% of the accounts receivable will be uncollectible.
(6) Salaries and wages earned but not paid by December 31, $3,600.
(7) Dues received in advance from members $8,900.
(c) Prepare an adjusted trial balance.
(d) Prepare closing entries and post.
Explanation / Answer
Answer (c) - Adjusted Trial balance Trial balance as on 31st December Answer (a) - Ledger Accounts Cash Accumulated Deprecaition- Building Particulars Debit Credit To balance b/d 15000 By balance b/d 38400 Cash 15000 By Depreciation 4000 Accounts Receivable 14600 Allowance for Doubtful accounts 2852 Prepaid Insurance 5500 Insurance exp. 3500 Land 350000 Accounts Receivable Building 120000 To balance b/d 13000 Accumulated Deprecaition- Equipment Depreciation 19000 To Rent revenue 1600 By balance b/d 70000 Accumulated Deprecaition- Building 42400 By Depreciation 15000 Equipment 150000 Accumulated Deprecaition- Equipment 85000 Common stock 400000 Retained earnings 82000 Allowance for Dounbtful accounts Dues revenue 191100 By balance b/d 1100 Common stock Advance dues received 8900 By Bad debt 1752 By balance b/d 400000 Green fees revenue 5900 Rent Revenue 19200 Utilities exp 54000 Salaries & Wages 83600 Salaries & Wages payable 3600 Prepaid Insurance Maintenance & Repairs 24000 To balance b/d 9000 By Insurance 3500 Retained earnings Bad debt 1752 By balance b/d 82000 Total 840952 840952 Answer (b) - Annual adjustment entries Land Particulars Debit Credit To balance b/d 350000 Dues revenue 1 Depreciation 4000 To Advance dues 8900 By balance b/d 200000 Accumulated Deprecaition- Building 4000 2 Depreciation 15000 Accumulated Deprecaition- Equipment 15000 Building 3 Insurance 3500 To balance b/d 120000 Green Fees revenue Prepaid Insurance 3500 By balance b/d 5900 4 Accounts Receivable 1600 Rent revenue 1600 5 Bad Debt 1752 Equipment Allowance for Dounbtful accounts 1752 To balance b/d 150000 Rent revenue By balance b/d 17600 6 Salaries & Wages 3600 By Accounts Recei. 1600 Salaries & Wages Payable 3600 7 Dues Revenue 8900 Advance Dues received 8900 Utilities exp. Answer (d) - Closing entries & Posting Debit Credit To balance b/d 54000 Maintenance & Repairs 1 Dues Revenue 191100 To balance b/d 24000 Rent Revenue 19200 Green fees revenue 5900 Profit & Loss statement 216200 2 Profit & Loss statement 185852 Insurance exp. 3500 Salaries & Wages Depreciation 19000 To balance b/d 80000 Utilities exp 54000 To Salaries/Wages payable 3600 Salaries & Wages 83600 Maintenance & Repairs 24000 Bad debt 1752 3 Profit & Loss statement 30348 Retained earnings 30348 Profit & Loss statement Revenue Dues Revenue 191100 Rent Revenue 19200 Green fees revenue 5900 Total 216200 Expenses Insurance exp. 3500 Depreciation 19000 Utilities exp 54000 Salaries & Wages 83600 Maintenance & Repairs 24000 Bad debt 1752 Total 185852 Net Income trf to Retained earning 30348 Balance sheet Assets Cash 15000 Accounts Receivable 14600 Prepaid Insurance 5500 Land 350000 Building 120000 Equipment 150000 0 Total 655100 Equity & Liabilities Accumulated Deprecaition- Building 42400 Accumulated Deprecaition- Equipment 85000 Allowance for Doubtful accounts 2852 Advance dues received 8900 Salaries & Wages payable 3600 Common stock 400000 Retained earnings 112348 Total 655100
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