Chesapeake Bay Kayak Rentals

Trial Balance

December $31,2023$

Unadjusted

Debit Credit

Cash $46,932$

Accounts Receivable $17,550$

Allowance for uncollectible accounts $1,263$

Prepaid Insurance

Supplies $2,731$

Land

Building $565,100$

Accumulated Depreciation $-$ Building

Computer Equipment $3,745$

Accumulated Depreciation $$ Computer Equipment

Kayaks, paddleboards, and life vests $($equipment$)30,000$

Accumulated Depreciation $$ Equipment

Accounts Payable $6,850$

Wages Payable

Interest Payable

Note Payable $535,020$

Unearned Revenue $2,400$

Common stock, $ $5$ par $(6,000$ shares issued and

outstanding$)30,000$

Paid In Capital In Excess of Par $42,000$

Retained Earnings

Tour Revenue $84,500$

Rental Revenue $74,192$

Advertising Expense $6,434$

Bad Debt Expense

Depreciation Expense $-$ Building

Depreciation Expense $-$ Equipment

Depreciation Expense $-$ Computer equipment

Insurance Expense $11,340$

$2$

Interest Expense

Supplies Expense

Utilities Expense $8,472$

Telephone and Internet Expense $2,475$

Wages Expense $78,920$

TOTALS $774,962774,962$

In addition to the trial balance, he has provided you with the following information $($Round all items to

nearest whole dollar.$)$:

a$.$ The annual liability insurance premium of $$11,340$ was paid April $2,2023.$ Ensure the

appropriate insurance expense has been recorded as of December $31.$ Make an adjustment

if necessary.

b$.$ Katie and Matt each worked $24$ hours in December $($December $29,30$ and $31)$ for which they

have not been paid. Katie earns $$18/$hour and Matt earns $$32/$hour$.$

c$.$ A physical count shows $$286$ of supplies on hand at December $31.$

d$.$ CBKR purchased land$/$building on April $1,2023,$ for $$565,100.$ Matt has not separated the

value of the land from the building. The appraisal performed at the time of purchase

assessed the land at $$360,000$ and the building at $$240,000.$ Properly allocated the purchase

price between the land and the building with an adjusting entry.

e$.$ Building purchased on April $1,2023,$ is expected to have a useful life of $40$ years with no

salvage value. Matt has chosen to use the straight$-$line method of depreciation based on

number of months in service. Round expense to nearest whole dollar.

f$.$ On May $23,$ Matt received a check for $$2,400$ for a tour schedule for July $4.$ He asked you

how to handle the receipt and you told him to credit the unearned revenue account. The

group enjoyed the tour and gave CBKR a glowing review!

g$.$ CBKR financed $100\%$ of the cost of the land$/$building with a $30$ year note payable with

monthly payments of $$3,760,$ and an interest rate of $7\%.$ His first payment was made May

$1,2023.$ Matt tells you he posted the entire amount of each payment $(8)$ against the note

payable account. You will need to prepare an AJE to reclassify interest portion of payments

to Interest expense. $($Note: Prepare an amortization schedule using an excel template. Loan

amount: $$565,100,$ annual interest rate: $7\%,$ loan period in years: $30,$ number of payments

per year: $12,$ start date of loan: $5/1/23,$ optional extra payments: $$0$; scheduled payment

should equal $$3,759\mathrm{.}62.$ Matt rounded up and is paying $$3,760/$month$.)$ Save amortization

schedule as part of workbook $($file$).$

h$.$ December interest on the note payable is due on January $1,2024,$ with the January $1$

payment. Accrue December interest expense.

i$.$ Kayaks, paddle boards, and life vests $($equipment$)$ were purchased on April $2,2023,$ at a cost

of $$30,000.$ This equipment is expected to have a service life of seven years and a salvage

value of $$600.$ The straight$-$line depreciation method is used.

j$.$ Computer equipment with a value of $$3,745$ was acquired April $1,2023$ and is expected to

have a five year life with no salvage value. Straight$-$line method of depreciation is used.

k$.$ Matt estimates that $4\%$ of account receivable balance at December $31$ is uncollectible. Matt

wrote off a $$1,263$ account in November.