Assets

111 Cash

112 Accounts Receivable

114 Prepaid Insurance

121 Land

125 Pool Structure

126 Accumulated Depreciation, Pool Structure

127 Fan System

128 Accumulated Depreciation, Fan System

129 Sailboats

130 Accumulated Depreciation, Sailboats Liabilities

221 Accounts Payable

222 Wages Payable

223 Mortgage Payable Owners Equity

311 R. Cury, Capital

312 R. Cury, Drawing

313 Income Summary

Revenue

411 Income from Services

412 Concessions Income

Expenses

511 Sailboat Rental Expense

512 Wages Expense

513 Advertising Expense

514 Utilities Expense

515 Interest Expense

516 Insurance Expense

517 Depreciation Expense, Pool Structure

518 Depreciation Expense, Fan System

519 Depreciation Expense, Sailboats

522 Miscellaneous Expense

You are to record transactions in a two-column general journal. Assume that the fiscal period

is one month. You will then be able to complete all of the steps in the accounting cycle.

When you are analyzing the transactions, think them through by visualizing the

T accounts or by writing them down on scratch paper. For unfamiliar types of

transactions, specific instructions for recording them are included. However, reason

them out for yourself as well. Check off each transaction as it is recorded.

June 1 Cury deposited $95,000 in a bank account for the purpose of buying Wind In

Your Sails, a business offering the use of small sailboats to the public at a

large indoor pool with a fan system that provides wind.

2 Bought Wind In Your Sails in its entirety for a total price of $216,100. Th

e assets include sailboats, $25,800; fan system, $13,300; pool structure, $140,000; and

land, $37,000. Paid $60,000 down and signed a mortgage note for the remainder.

June 3 Received and paid bill for newspaper advertising, $350.

3 Received and paid bill for a one-year premium for insurance, $12,000.

3 Bought additional boats from Louis Manufacturing Co. for $7,200, paying $3,200 down, with the remainder due in 30 days.

3 Signed a contract with a vending machine service to lease space for vending machines. The rental income agreed upon is 10 percent of the sales generated from the machines, with the estimated total rental income payable in advance. Received estimated cash payment for June, $150.

3 Received bill from Quick Printing for promotional handouts, $540

(Advertising Expense).

3 Signed a contract for leasing sailboats from K. Einstein Boat Co. and paid

rental fee for June, $700.

5 Paid cash for miscellaneous expenses, $104.

8 Received $2,855 in cash as income for the use of the boats.

9 Bought an addition for the fan system on account from Stark Pool Supply,

$745.

15 Paid wages to employees for the period ended June 14, $3,900.

16 Paid on account for promotional handouts already recorded on June 3, $540.

16 Cury withdrew cash for personal use, $2,500.

16 Bought additional sails from Canvas Products, Inc., $850; payment due in 30

days.

16 Received $6,850 in cash as income for the use of the boats.

19 Paid cash for miscellaneous expenses, $40.

20 Paid cash to Louis Manufacturing Co. as part payment on account, $1,300.

22 Received $8,260 in cash for the use of the boats.

23 Received a reduction in the outstanding bill from Louis Manufacturing Co.

for a boat received in damaged condition, $380.

24 Received and paid telephone bill, $324.

29 Paid wages for period June 15 through 28, $4,973.

30 Paid cash to Stark Pool Supply to apply on account, $475.

30 Received and paid electric bill, $345.

30 Paid cash as an installment payment on the mortgage, $1,848. Of this

amount, $497 represents a reduction in the principal and the remainder is interest.

30 Received and paid water bill, $590.

30 Bought additional boats from Riddle and Son for $5,320, paying $1,550

down, with the remainder due in 30 days.

30 Cury withdrew cash for personal use, $1,800.

30 Received $5,902 in cash as income for the use of the boats.

30 Sales from vending machines for the month amounted to $1,780. Ten

percent of $1,780 equals $178. Because you have already recorded $150 as

concessions income, list the additional $28 revenue earned from the vending

machine operator. (Cash was not received.)

Required

1. Journalize the transactions, starting on page 1 of the general journal.

2. Post the transactions to the ledger accounts.

3. Prepare a trial balance in the first two columns of the work sheet.

4. Complete the work sheet. Data for the adjustments are as follows:

a. Insurance expired during the month, $1,000.

b. Depreciation of pool structure for the month, $715.

c. Depreciation of fan system for the month, $260.

d. Depreciation of sailboats for the month, $900.

e. Wages accrued at June 30, $810.

5. Journalize adjusting entries.

6. Post adjusting entries to the ledger accounts.

7. Prepare the income statement.

8. Prepare the statement of owners equity.

9. Prepare the balance sheet.

10. Journalize closing entries.

11. Post closing entries to the ledger accounts.

12. Prepare a post-closing trial balance

Trial balance total $281858, net income $7143, post closing trial balance total $263341