Question Details

Week 3 assignment

P3-2A Neosho River Resort, Inc. opened for business on June 1 with eight air-conditioned
units. Its trial balance before adjustment on August 31 is as follows.
                                               NEOSHO RIVER RESORT, INC.
                                                           Trial Balance
                                                          August 31, 2008
Account Number                                                             Debit                                      Credit
101                                           Cash                          $ 19,600
126                                           Supplies                         3,300
130                                           Prepaid Insurance            6,000
140                                           Land                             25,000
143                                           Cottages                     125,000
149                                           Furniture                       26,000
201                                           Accounts Payable                                                        $ 6,500
208                                           Unearned Rent                                                                7,400
275                                           Mortgage Payable                                                          80,000
311                                           Common Stock                                                            100,000
332                                           Dividends                        5,000
429                                           Rent Revenue                                                                 80,000
622                                           Repair Expense               3,600
726                                           Salaries Expense           51,000          
732                                           Utilities Expense              9,400
                                                                                  $273,900                                   $273,900

In addition to those accounts listed on the trial balance, the chart of accounts for Neosho River
Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable,
No. 144 Accumulated Depreciation—Cottages, No. 150 Accumulated Depreciation—Furniture,
No. 212 Salaries Payable,No. 230 Interest Payable,No. 320 Retained Earnings,No. 620 Depreciation
Expense—Cottages, No. 621 Depreciation Expense—Furniture, No. 631 Supplies Expense,
No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
1. Insurance expires at the rate of $400 per month.
2. A count on August 31 shows $600 of supplies on hand.
3. Annual depreciation is $6,000 on cottages and $2,400 on furniture.
4. Unearned rent of $4,100 was earned prior to August 31.
5. Salaries of $400 were unpaid at August 31.
6. Rentals of $1,000 were due from tenants at August 31. (Use Accounts Receivable.)
7. The mortgage interest rate is 9% per year. (The mortgage was taken out on August 1.)
Instructions:
(a) Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31.
(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts
     and post the adjusting entries. (Use J1 as the posting reference.)
(c) Prepare an adjusted trial balance on August 31.
(d) Prepare an income statement and a retained earnings statement for the 3 months ending
     August 31 and a balance sheet as of August 31.