Trade Winds Airlines provides passenger and freight service among some Pacific islands. The accounts are adjusted and

Question:

Trade Winds Airlines provides passenger and freight service among some Pacific islands. The accounts are adjusted and closed each month. At June 30 the trial balance shown at the top of page 165 was prepared from the ledger. LO8 Other data

(a) Monthly rent amounted to $3,000.

(b) Insurance expense for June was $3,900.

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(c) All necessary maintenance work was provided by Ryan Air Service at a fixed charge of $7,500 a month. Service for three months had been paid for in advance on June 1. (Debit Maintenance Expense.)

(d) Spare parts used in connection with maintenance work amounted to $3,750 dur¬
ing the month. (Debit Maintenance Expense. Use two lines on work sheet for this expense account.)

(e) At the time of purchase, the remaining useful life of the airplanes, which were several years old, was estimated at 5,000 hours of flying time. During June, total flying time amounted to 160 hours. ($810,000 cost 5,000 hours = depreciation per hour flying time.)
(f ) The Chamber of Commerce had purchased 2,000 special tickets for $60,000. Note that the special price per ticket was $30. Each ticket allowed the holder one flight normally priced at $45. During the month 400 of these reduced-price tickets had been used by the holders. (Debit Unearned Passenger Revenue.)
(g) Salaries earned by employees but not paid amounted to $3,300 at June 30.
(h) Interest accrued on notes payable at June 30 amounted to $5,000.
Instructions a Prepare a work sheet for the month ended June 30, 19 -
b Prepare an income statement, a statement of owner’s equity, and a balance sheet.
Follow the format illustrated on page 148.
c Prepare adjusting and closing journal entries.