P8-2A Ncosho 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, 2011 Account Number 101 126 130 140 143 149 201 209 275 311 332 429 622 726 732 Cash Supplies Prepaid Insurance() Land Cottages() Furniture Accounts Payable Unearned Rent Revenue Mortgage Payable() Share CapitalOrdinary Dividends Rent Revenue Repair Expense Salaries Expense Utilities Expense Debit 19,600 3,300 6,000 25,000 125,000 26,000 Credit

6,500 7,400 80,000 100,000 5,000 80,000 3,600 51,000 9,400 273,900

273,900

In addition to those accounts listed on the trial balance, the chart of accounts for Neosho River Resort, Inc. also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation()Cottages, No. 150 Accumulated DepreciationFurniture, No. 212 Salaries Payable. No. 230 Interest Payable(). No. 320 Retained Earnings, No. 620 Depreciation ExpenseCottages. No. 621 Depreciation ExpenseFurniture. No. 630 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.(). Other data: 1. Insurance expires at the rate of400 per month.( 400/) 2. A count on August 31 shows600 of supplies of hand.( 600 ) 3. Annual depreciation is6,000 on cottages and 2,400 on furniture.() 4. Unearned rent revenue of4,100 was earned prior to August 31.( 4,100) 5. Salaries of 400 were unpaid at august 31.( 400) 6. Rentals of1,000 were due from tenants() at August 31.(Use Accounts Receivable.)( 1,000) 7. The mortgage interest rate is 9% per year.(The mortgage was taken out on August 1.)( 9%) 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.( ) (a) Data Aug 31 31 31 Account Titles and Explanation Insurance Expense(400*3) Prepaid Insurance Supplies Expense(3,300-600) Supplies Depreciation ExpenseCottages (6,000*0.25) Accumulated Depreciation Cottages Depreciation ExpenseFurniture (2,400*0.25) Accumulated Depreciation Furniture 31 31 31 31 Unearned Rent Revenue Rent revenue Salaries Expense Salaries Payable Account Receivable Rent Receivable Interest Expense Interest Payable 1 [(80,000*9%)*12 Ref. 722 130 631 126 620 144 621 150 209 429 726 212 112 429 718 230 4,100 4,100 400 400 1,000 1,000 600 600 No.101 Explanation Balance Ref Debit Credit Balance 19,600 No.112 Ref J1 Debit 1,000 Credit Balance 1,000 No.126 Explanation Balance Adjusting Ref J1 2,700 Debit Credit Balance 3,300 600 No.130 Ref J1 1,200 Debit Credit Balance 6,000 4,800 Debit 1,200 1,200 2,700 2,700 1,500 1,500 600 600 Credit

31

(b) Cash Data Aug 31

Account Receivable Data Aug 31 Supplies Data Aug 31 31 Explanation Adjusting

Prepaid Insurance Data Aug 31 Explanation Balance Adjusting

Land Data Aug 31 Cottages Data Aug 31 Explanation Balance Ref Debit Credit Explanation Balance Ref Debit Credit

No.112 Balance 25,000 No.143 Balance 125,000 No.144 Ref J1 Debit Credit 1,500 Balance 1,500 No.149 Explanation Balance Ref Debit Credit Balance 26,000 No.150 Ref J1 Debit Credit 600 Balance 600 No.201 Ref Debit Credit Balance 6,500 No.209 Ref J1 4,100 Debit Credit Balance 7,400 3,300 No.212 Ref J1 Debit Credit 400 Balance 400 No.230 Ref J1 Debit Credit 600 Balance 600 No.275 Ref Debit Credit Balance 80,000

Accumulated DepreciationCottages Data Aug 31 Furniture Data Aug 31 Explanation Adjusting

Accumulated DepreciationFurniture Data Aug 31 Explanation Adjusting

Accounts Payable Data Aug 31 Explanation Balance

Unearned Rent Revenue Data Aug 31 31 Explanation Balance Adjusting

Salaries Payable Data Aug 31 Explanation Adjusting

Interest Payable Data Aug 31 Explanation Adjusting

Mortgage Payable Data Aug 31 Explanation Balance

Share CapitalOrdinary Data Aug 31 Explanation Balance Ref Debit Credit

No.311 Balance 100,000 No.132 Ref NEOSHO RIVER RESORT, INC. Adjusting Trail Balance August 31, 2011 Debit Credit Debit Credit Balance 9,400

Utilities Expense Data Aug 31 Explanation Balance

Cash Account Receivable Supplies Prepaid Insurance() Land Cottages Accumulated DepreciationCottage Furniture Accumulated DepreciationFurniture Accounts Payable Unearned Rent Revenue Salaries Payable Interest Payable Mortgage Payable Share CapitalOrdinary Dividends Rent Revenue Depreciation ExpenseCottages Depreciation ExpenseFurniture Repair Expense Supplies Expense Interest Expense Insurance Expense Salaries Expense Utilities Expense

19,600 1,000 600 4,800 25,000 125,000 1,500 2,600 600 6,500 3,300 400 600 80,000 100,000 5,000 85,000 1,500 600 3,600 2,700 600 1,200 51,400 9,400 278,000 278,000

NEOSHO RIVER RESORT, INC. Income Statement for the Three Months Ended August 31, 2011 Revenues Rent revenue Expense Salaries expense Utilities expense Repair expense Supplies expense Depreciation expensecottages Insurance expense Interest expense Depreciation expensefurniture Total expense Net income NEOSHO RIVER RESORT, INC. Retained Earnings Statement For the Three Months Ended August 31, 2011 Retained Earnings, June 1 Add: Net income Less: Dividends 0 14,100 14,100 5,000 9,100 85,100 51,400 9,400 3,600 2,700 1,500 1,200 600 600 71,000 14,100

Retained Earnings, August 31

NEOSHO RIVER RESORT, INC. Statement of Financial Position For the Three Months Ended August 31, 2011 Assets Land Cottages Less: Accum. depreciationcottages Furniture Less: Accum. depreciationfurniture Prepaid insurance Supplies Account receivable Cash Total assets Equity and Liabilities Equity Share capitalordinary Retained earnings Liabilities Account payable Mortgage Payable Unearned rent revenue Interest payable Salaries payable Total equity and liabilities 100,000 9,100 6,500 80,000 3,300 600 400 90,800 199,900 25,000 125,000 15,000 26,000 600 123,500 25,400 4,800 600 1,000 19,600 199,900

109,100

 2011.12.12
P2-2A Jane Kent is a licensed() accountant. During the first month of operations of her business Jane Kent, Accountant, the following events() and transactions occurred. May 1 Shareholders invested 25,000 cash in exchange for ordinary shares. 2 Hired() a secretary receptionist() at a salary of 2,000 per month. 3 Purchased 2,500 of supplies() on account from Read Supply company. 7 Paid office rent of 900 cash for the month. 11 Completed() a tax() assignment() and billed client 2,100 for services provided. 12 Received 3,500 advance on management consulting() engagement.() (On management consulting engagement ) 17 Received cash of 1,200 for services completed for H.Arnold Co. 31 Paid secretary-receptionist 2,000 salary for the month. 31 Paid 40% of balance due Read Supply Company. Jane uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No.201 Accounts Payable, No. 209 Unearned Revenue, No. 311 Share Capital-Ordinary, No. 400 Service Revenue, No. 726 Salaries Expense, and No.729 Rent Expense. Instructions (a) Journalize the transactions. (b) Post to the ledger accounts(). (c) Prepare a trial balance on May 31, 2011.

P2-2A (a)

Data
May 1

Account Titles and Explanation

Cash Share Capital-Ordinary (Issued shares for cash)

Ref.
101 311

Debit
25,000

Credit
25,000

2 3

No entry-not a transaction Supplies Accounts Payable (Purchased supplies on account) Rent Expense Cash (Paid office rent) Accounts Receivable Service Revenue (Billed client for services provided) Cash Unearned Revenue (Received cash for future services) Cash Service Revenue (Received cash for services provided) Salaries Expense Cash (Paid salaries) Accounts Payable (2,500 * 40%) Cash (Paid creditor on account) 126 201 2,500 2,500

729 101

900 900

11

112 400

2,100 2,100

12

101 209

3,500 3,500

17

101 400

1,200 1,200

31

726 101

2,000 2,000

31

201 101

1,000 1,000

(b) Cash Data May 1 7 12 17 31 31 Explanation Ret J1 J1 J1 J1 J1 J1 Debit 25,000 3,500 1,200 2,000 1,000 Credit 900 No. 101 Balances 25,000 24,100 27,600 28,800 26,800 25,800 No. 112 Balance 2,100 No. 126 Balance 2,500 No. 201 Balance 1,500 No. 209 Balance 3,500 No. 311 Balance 25,000 No. 311 Balance 2,100 3,300 No. 726 Balance 2,000 No. 729 Balance 900

Accounts Receivable Data Explanation May11 Supplies Data May 3

Ref. J1

Debit 2,100

Credit

Explanation

Ref. J1

Debit 2,500

Credit

Accounts Payable Data Explanation May 3 31 Unearned Revenue Data Explanation May 12 Share CapitalOrdinary Data Explanation May 1 Service Revenue Data Explanation May 11 17 Salaries Expense Data Explanation May 31 Rent Expense Data May 7

Ref. J1 J1

Debit 1,000

Credit 2,500

Ref. J1

Debit

Credit 3,500

Ref. J1

Debit

Credit 25,000

Ref. J1 J1

Debit

Credit 2,100 1,200

Ref. J1

Debit 2,000

Credit

Explanation

Ref. J1

Debit 900

Credit

(c) JANE KENT ACCOUNTANT Trial Balance May 31, 2011 Debit Credit Cash 25,800 Accounts Receivable 2,100 Supplies 2,500 Unearned Revenue 1,500 Share CapitalOrdinary 3,500 Service Revenue 3,300 Salaries Expense 2,000 Rent Expense 900 33,300 33,300

E2-2 Selected() transaction for D.Reyes, as interior() decorating() firm( ), in its first month of business, are as follows. Jan. 2 3 9 11 16 20 23 28 Instructions (a)They basic type() of account debited and credited (asset, liability, equity). (b)The specific account() debited and credited (cash, rent expense, service revenue, etc). (c)Whether the specific account is increased or decreased. (d)The normal balance of the specific account. Use the following format, in which the January 2 transaction is given as an example. Account Debited (a) (b) (c) Basic Specific Type Account Effect Asset Cash Increase Account Credited (a) (b) (c) Basic Specific Type Account Effect Equity Share Increase Capital Invested $10,000 cash in the business in exchange for ordinary shares. Purchased used car for $4,000 cash for use in the business. Purchased supplies on account for $500 Billed customer $1,800 for services performed. Paid $200 cash for advertising. Received $700 cash from customers billed on January 11. Paid creditor $300 cash on balance owed. Declared ()and paid a $1,000 cash dividend.

Data Jan 2

(d) Normal Balance Debit

Data Jan 2

(d) Normal Balance Debit

Account Debited Date Jan 2 Jan 3 Jan 9 Jan 11 Jan 16 Jan 20 Jan 23 Jan 28 (a) Basic Type Asset Asset Asset Asset Equity Asset Liability Equity (b) Specific Account Cash Equipment Supplies Accounts Receivable Advertising Expense Cash Accounts Payable Dividends Increase Increase Increase Increase Increase Increase Decrease Increase (c) Effect (d) Normal Balance Debit Debit Debit Debit Debit Debit Credit Debit (a) Basic Type Equity Asset Liability Equity Asset Asset Asset Asset

Account Credited (b) Specific Account Share Capital Cash Accounts payable Service Revenue Cash Accounts Receivable Cash Cash Increase Decrease Increase Increase Decrease Decrease Decrease Decrease (c) Effect (d) Normal Balance Credit Debit Credit Credit Debit Debit Debit Debit