Neosho River Resort opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is as follows.

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. 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 revenue 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 an owner’s equity statement for the 3 months ending August 31 and a balance sheet as of August 31.

NEOSHO RIVER RESORT Trial Balance August 31, 2010 Debit S 19,600 3.300 6,000 25,000 125,000 26,000 Account Number 101 126 130 140 143 149 201 209 275 301 306 429 622 726 732 Credit Cash Supplies Prepaid Insurance Land Cottages Furniture Accounts Payable Unearned Rent Revenue Mortgage Payable P. Harder. Capital $ 6.500 7.400 80,000 100.000 Harder. Drawing Rent Revenue Repair Expense Salaries Expense Utilities Expense 5,000 80,000 3.600 51,000 9.400 $273.900 $273.900