Intermediate Accounting: Prepare an adjusted trial balance?

Question

Trial Balance for Greco
August 31, 2008
DR Cash 6700
DR Prepaid Insurance 3500
DR Supplies 1800
DR Land 20000
DR Cottages 142000
DR Furniture 16000
CR Accounts Payable 4800
CR Unearned Rent Revenue 4600
CR Loan Payable 77000
CR Common Shares 81000
CR Retained Earnings 9000
DR Dividends 5000
CR Rent Revenue 76200
DR Salaries Expense 44800
DR Utilities Expense 9200
DR Repair Expense 3600
Totals $252600

Data
1. The balance in Prepaid Insurance is a one-year premium paid on June 1, 2008.
2. An inventory count on August 31 shows $450 of supplies on hand.
3. Annual amortization rates are cottages 4% and furniture 10%. The residual value is estimated to be 10% of hte cost.
4. Unearned Rent Revenue of $3,800 was earned prior to August 31.
5. Salaries of $375 were unpaidat August 31.
6. Rental fees of $800 were due from tenants at August 31.
7. The loan interest rate is 8% per year.

Countinuing from the question.. . .
(a) Journalize the adjusting entries on August 31 for the three-month period June 1 to August 31.
(b) Prepare an adjusted trial balance as at August 31.

Note: Points would be awarded for the best answer =)
- Nathe

Answer 1

1. The balance in Prepaid Insurance is a one-year premium paid on June 1, 2008.
Dr Insurance expense 875
Cr Prepaid insurance 875

2. An inventory count on August 31 shows $450 of supplies on hand.
Dr Supplies expense 1,350
Cr Supplies 1,350

3. Annual amortization rates are cottages 4% and furniture 10%. The residual value is estimated to be 10% of hte cost.
Dr Depn - cottages 1,278
Dr Depn - furniture 360
Cr Accd depn - cottages 1,278
Cr Accd depn - furniture 360

4. Unearned Rent Revenue of $3,800 was earned prior to August 31.
Dr Unearned rent revenue 3,800
Cr Rent revenue 3,800

5. Salaries of $375 were unpaidat August 31.
Dr Salaries expense 375
Cr Salaries payable 375

6. Rental fees of $800 were due from tenants at August 31
Dr A/cs receivable 800
Cr Rent revenue 800

7. The loan interest rate is 8% per year.
Dr Loan interest 1,540
Cr Loan interest payable 1,540

Adjusted trial balance:
DR Cash 6,700
DR Prepaid Insurance 2,625
DR Supplies 450
DR Accounts receivable 800
DR Land 20,000
DR Cottages 142,000
CR Accd depn cottages 1,278
DR Furniture 16,000
CR Accd depn furniture 360
CR Accounts Payable 4,800
CR Unearned Rent Revenue 800
CR Loan Payable 77,000
CR Loan interest payable 1,540
CR Salaries payable 375
CR Common Shares 81,000
CR Retained Earnings 9,000
DR Dividends 5,000
CR Rent Revenue 80,800
DR Depreciation - cottages 1,278
DR Depreciation - furniture 360
DR Insurance expense 875
DR Loan interest 1,540
DR Salaries Expense 45,175
DR Supplies expense 1,350
DR Utilities Expense 9,200
DR Repair Expense 3,600
Totals : $256,953

Answer 2

Adjusting Trial Balance

Answer 3

I will do the AJE's for 10 points and you can finish your homework from there.
1. Expense 3 mos or 1/4 of the 3500 prepaid insurance. Credit the 875 to the prepaid insurance.
2. Expense the supplies used, 1800-450=1350 credit to supplies.
3. Amortize 1440 for furniture and 5112 for the cottages. You will have to set up a contra asset to credit the accumulated amortization.
4. Credit Revenue for $3800 and debit the unearned rent revenue account.
5. Debit salaries expense and credit salaries payable for $375.
6. Credit Rent Revenue and Debit Rent Receivable for $800.
7. Debit Interest Expense and credit Interest Payable for $6160 annual interest unless you feel it is paid monthly, but I don't see any prior interest expense so I am assuming its annual.

For check figures, Supplies should be $450, Furniture should still be $16,000, and Rent Revenue, before clearing out to income summary and retained earnings, should be $80,800.

Answer 4

how did you calculate the depreciation? on number 3