1 ) Prepare adjustment journal entries.

2 ) Prepare updated Trial Balance

3 ) Income statement

4 ) Balance sheet

Also show your workings.

Credit $ 47,750 HIGHLAND COVE RESORT Trial Balance August 31, 2014 Debit Cash $ 17,520 Prepaid insurance 4,240 Supplies 995 Land 35,000 Buildings 150,000 Accumulated depreciation--buildings Furniture 33,000 Accumulated depreciation--furniture Accounts payable Unearned revenue Mortgage payable K. MacPhail, capital K. MacPhail, drawings 42,735 Rent revenue Depreciation expense 5,775 Insurance expense 6,890 Interest expense 5,720 Repairs expense 14,400 Salaries expense 153,000 Supplies expense 4,450 Utilities expense 37,600 $511,325 12,925 8,500 15,000 96,000 85,000 246,150 $511,325 Additional information: 1. The company pays $6,360 for its annual insurance policy on March 31 of each year. 2. A count shows $560 of supplies on hand on August 31, 2014. 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 $100 deposit if they want to book a room during peak times. An analysis of these bookings indicates that 150 deposits were received (all credited to Unearned Revenue) and only 40 of the deposits have not yet been earned by August 31, 2014. 6. The mortgage interest rate is 6.5% per year. Interest has been paid to August 1, 2014. 7. Salaries accrued to the end of August were $1,450. 8. The August utility bill of $3,420 is unrecorded and unpaid. 9. On August 31, Highland Cove has earned $1,350 of rent revenue from customers who are currently renting rooms but will not pay the amount owing until they check out in September. This amount is in addition to any deposits earned in item (5) above. Credit $ 47,750 HIGHLAND COVE RESORT Trial Balance August 31, 2014 Debit Cash $ 17,520 Prepaid insurance 4,240 Supplies 995 Land 35,000 Buildings 150,000 Accumulated depreciation--buildings Furniture 33,000 Accumulated depreciation--furniture Accounts payable Unearned revenue Mortgage payable K. MacPhail, capital K. MacPhail, drawings 42,735 Rent revenue Depreciation expense 5,775 Insurance expense 6,890 Interest expense 5,720 Repairs expense 14,400 Salaries expense 153,000 Supplies expense 4,450 Utilities expense 37,600 $511,325 12,925 8,500 15,000 96,000 85,000 246,150 $511,325 Additional information: 1. The company pays $6,360 for its annual insurance policy on March 31 of each year. 2. A count shows $560 of supplies on hand on August 31, 2014. 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 $100 deposit if they want to book a room during peak times. An analysis of these bookings indicates that 150 deposits were received (all credited to Unearned Revenue) and only 40 of the deposits have not yet been earned by August 31, 2014. 6. The mortgage interest rate is 6.5% per year. Interest has been paid to August 1, 2014. 7. Salaries accrued to the end of August were $1,450. 8. The August utility bill of $3,420 is unrecorded and unpaid. 9. On August 31, Highland Cove has earned $1,350 of rent revenue from customers who are currently renting rooms but will not pay the amount owing until they check out in September. This amount is in addition to any deposits earned in item (5) above