Refer to the data for Rocky Mountain Resort Inc. in P4-12B.

In P4-14B

The following is the unadjusted trial balance for Rocky Mountain Resort Inc. at its year end, August 31. The company adjusts its accounts annually.

Additional information:
1. The one-year insurance policy was purchased on May 31 for $12,720.
2. A count of supplies on August 31 shows $1,380 of supplies on hand.
3. The buildings have an estimated useful life of 50 years.
4. The furniture has an estimated useful life of 10 years.
5. Customers must pay a $200 deposit if they want to book a cottage during the peak period. An analysis of these bookings indicates 355 deposits were received and credited to Unearned Revenue. Only 45 of these deposits have not been earned by August 31.
6. Salaries of $1,680 were unpaid at August 31.
7. The August utility bill of $3,120 has not yet been recorded or paid.
8. On August 25, a local business contracted with Rocky Mountain to rent one of the cottages for six months, starting October 1, at a rate of $3,000 per month. An advance payment equal to two months' (October and November) rent was received on August 31 and credited to Rent Revenue.
9. The mortgage interest rate is 7%. Interest has been paid to August 1; the next payment is due September 1.
10. In May, the company issued common shares for $5,000.
11. Income tax payable is estimated to be $2,000.
Instructions
(a) Prepare the closing journal entries.
(b) Post the closing entries to the T accounts prepared in P4-12B.
(c) Prepare a post-closing trial balance at August 31.

Transcribed Image Text:

ROCKY MOUNTAIN RESORT INC. Trial Balance August 31,2012 Debit $ 38,820 Credit 3 Supplies Prepaid insurance Land Buildings Accumulated depreciation-buildings Furniture Accumulated depreciation-furniture Accounts payable Unearned revenue Mortgage payable, due 2015 12,720 70,000 290,000 $87,000 22,880 13,000 71,000 120,000 40,000 72,000 Common shares Retained earnings Dividends Rent revenue Salar Utilities expense Repair expense Interest expense Income tax expense 10,000 497,000 306,000 75,200 28,250 7,700 20,000 $922,880 ies expense $922,880