Question

the question from chapter 4 Finanacial accounting By kimmel 7th canadian edition

Problem 4-12A

$498,006

$498,006

Please answer :

(a) Prepare adjusting journal entries for the month. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all amounts to the nearest dollar. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

(b)Set up T accounts, enter any opening balances, and post the adjusting journal entries prepared in the above part. (Post entries in the order of journal entries presented in the previous part.)

(c) Prepare an adjusted trial balance at May 31

(d) Prepare an income statement for the year.

(e) Prepare a statement of changes in equity for the year. Note that $3,610 of common shares were issued during the month of May.

(f) Prepare a statement of financial position for the year. (List Current Assets in order of liquidity. List Property, plant and equipment in order of land, buildings and furnitur)

the question from chapter 4 Finanacial accounting By kimmel 7th canadian edition

Problem 4-12A

The following is the unadjusted trial balance for Rainbow Lodge Ltd. at its year end, May 31, 2018. The company adjusts its accounts monthly.

 

 

Debit

 

Credit

 

Cash

 

$6,366

 

 

 

Accounts receivable

 

11,480

 

 

 

Supplies

 

4,870

 

 

 

Prepaid insurance

 

4,900

 

 

 

Land

 

107,310

 

 

 

Buildings

 

168,000

 

 

 

Accumulated depreciation—building

 

 

 

$ 23,400

 

Furniture

 

30,900

 

 

 

Accumulated depreciation—furniture

 

 

 

20,800

 

Accounts payable

 

 

 

8,600

 

Unearned revenue

 

 

 

15,900

 

Mortgage payable, due 2021

 

 

 

120,000

 

Common shares

 

 

 

60,000

 

Retained earnings

 

 

 

41,230

 

Dividends declared

 

1,900

 

 

 

Rent revenue

 

 

 

208,076

 

Salaries expense

 

99,500

 

 

 

Utilities expense

 

23,910

 

 

 

Depreciation expense

 

14,890

 

 

 

Interest expense

 

9,390

 

 

 

Insurance expense

 

6,860

 

 

 

Advertising expense

 

1,070

 

 

 

Income tax expense

 

6,660

 

 

 

 

 

$498,006

 

$498,006

 

 

Additional information:

1.

 

An annual insurance policy was purchased on October 1, 2017, for $11,760 cash.

2.

 

A count of supplies shows $1,244 of supplies on hand on May 31.

3.

 

The building have an estimated useful life of 20 years and straight-line depreciation is applied.

4.

 

The furniture have an estimated useful life of five years and straight-line depreciation is applied.

5.

 

Customers must pay a $100 deposit if they want to book a room in advance during the peak period. An analysis of these bookings indicates that 159 deposits were received and credited to Unearned Revenue. By May 31, 25 of the deposits were earned.

6.

 

On May 25, a local business contracted with Rainbow Lodge to rent one of its housekeeping units for four months, starting June 1, at a rate of $2,580 per month. An advance payment equal to one month’s rent was paid on May 25 and credited to Rent Revenue.

7.

 

On May 31, Rainbow Lodge has earned $1,851 of rent revenue from customers who are currently staying at the inn. The customers will pay the amount owing only when they check out in early June.

8.

 

Salaries of $1,641 are unpaid at May 31.

9.

 

Interest on the mortgage payable is $700 for the month of May and due June 1.

10.

 

The May utility bill of $2,274 has not yet been recorded or paid.

11.

 

Additional income tax is estimated to be $970.