Problem 4-4A Roadside Travel Court Ltd. was organized on July 1, 2017, by Betty Johnson. Betty is a good manager but a poor accountant. From the trial balance prepared by a part- time bookkeeper, Betty prepared the following income statement for her fourth quarter, which ended June 30, 2018 $219,000 ROADSIDE TRAVEL COURT LTD. Income Statement Quarter Ended June 30, 2018 Rent revenue Expenses Salaries expense $89,000 Repair and maintenance expense 4,500 Advertising expense 4,100 Depreciation expense 2,600 Utilities expense 1,000 Net Income 101,200 $117,800 Betty suspected that something was wrong with the statement because net income had never exceeded $36,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance contains the following additional selected balances at June 30, 2018. Supplies Prepaid insurance $ 7.600 12.000 You then make inquiries and discover the following items: 1. Rental revenue includes advanced rental payments received for summer occupancy in July, in the amount of $55,000. 2. There were $900 of supplies on hand at June 30. 3. Prepaid insurance resulted from the purchase of a one-year policy for $12,000 on April 1, 2018 4. The mail the first week of July brought the following bills: advertising for the week of June 24, $100; repairs made June 18, $4,690; and utilities for the month of June, $220. 5. Salaries are $300 per day. At June 30, four days' salaries have been incurred but not paid. 6. Interest on the mortgage payable is $1,850 for the quarter and due July 1. 7. Income tax of $8,500 for the quarter is due in July RCES ure NEKI Problem 4-4A INTER VERSION Roadside Travel Court Ltd. was organized on July 1, 2017, by Betty Johnson, Betty is a good manager but a poor accountant. From the trial balance prepared by a part- time bookkeeper, Betty prepared the following income statement for her fourth quarter, which ended June 30, 2018 ROADSIDE TRAVEL COURT LTD. Income Statement Quarter Ended June 30, 2018 Rent revenue $219,000 Expenses Salaries expense $89,000 Repair and maintenance expense 4,500 Advertising expense 4,100 Depreciation expense 2,600 Utilities expense 1,000 101,200 Net income $117,800 dy Betty suspected that something was wrong with the statement because net income had never exceeded $36,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance contains the following additional selected balances at June 30, 2018. Supplies Prepaid Insurance Mortgage payable $ 7,600 12,000 148,000 247 PM AENG