TUTORIAL TEST 3 ANSWER

(a)
J1
Date Account Titles and Explanation Ref. Debit Credit
Aug. 31 Insurance Expense ($300 X 3) ................. 722 900
Prepaid Insurance ........................... 130 900

31 Supplies Expense ($3,300 – $800) ............... 631 2,500

Supplies .......................................... 126 2,500

31 Depreciation Expense
($6,000 X 1/4) + ($2,400 X 1/4) .......... 620 2,100
Accumulated Depreciation—
Buildings .................................... 144 1,500
Accumulated Depreciation—
Equipment .................................. 150 600

31 Unearned Rent Revenue........................... 208 4,800

Rent Revenue ................................. 429 4,800

31 Salaries and Wages Expense .................... 726 400

Salaries and Wages Payable........... 212 400

31 Accounts Receivable ................................ 112 4,000

Rent Revenue ................................. 429 4,000

31 Interest Expense ....................................... 718 600

Interest Payable
[($80,000 X 9%) X 1/12] ........... 230 600

(b)
Cash No. 101
Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 19,600
Accounts Receivable No. 112
Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 4,000 4,000

Supplies No. 126

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 3,300
31 Adjusting J1 2,500 800

Prepaid Insurance No. 130

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 6,000
31 Adjusting J1 900 5,100

Land No. 140

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 25,000

Buildings No. 143

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 125,000

Accumulated Depreciation—Buildings No. 144

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 1,500 1,500

Equipment No. 149

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 26,000
Accumulated Depreciation—EquipmentNo. 150
Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 600 600

Accounts Payable No. 201

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 6,500

Unearned Rent Revenue No. 208

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 7,400
31 Adjusting J1 4,800 2,600

Salaries and Wages Payable No. 212

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 400 400

Interest Payable No. 230

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 600 600

Mortgage Payable No. 275

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 80,000

Owner’s Capital No. 301

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 100,000
Owner’s Drawings No. 306
Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 5,000

Rent Revenue No. 429

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 80,000
31 Adjusting J1 4,800 84,800
31 Adjusting J1 4,000 88,800

Depreciation Expense No. 620

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 2,100 2,100

Maintenance and Repairs Expense No. 622

Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 3,600

Supplies Expense No. 631

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 2,500 2,500

Interest Expense No. 718

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 600 600

Insurance Expense No. 722

Date Explanation Ref. Debit Credit Balance
Aug. 31 Adjusting J1 900 900
Salaries and Wages Expense No. 726
Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 51,000
31 Adjusting J1 400 51,400
Utilities Expense No. 732
Date Explanation Ref. Debit Credit Balance
Aug. 31 Balance 9,400
(c) MAQUOKETA RIVER RESORT
Adjusted Trial Balance
August 31, 2017

Debit Credit
Cash ............................................................................... $ 19,600
Accounts Receivable ..................................................... 4,000
Supplies ......................................................................... 800
Prepaid Insurance .......................................................... 5,100
Land............................................................................... 25,000
Buildings ....................................................................... 125,000
Accumulated Depreciation—Buildings ........................ $ 1,500
Equipment ..................................................................... 26,000
Accumulated Depreciation—Equipment ...................... 600
Accounts Payable .......................................................... 6,500
Unearned Rent Revenue................................................ 2,600
Salaries and Wages Payable.......................................... 400
Interest Payable ............................................................. 600
Mortgage Payable ......................................................... 80,000
Owner’s Capital ............................................................ 100,000
Owner’s Drawings ........................................................ 5,000
Rent Revenue ................................................................ 88,800
Depreciation Expense ................................................... 2,100
Maintenance and Repairs Expense ............................... 3,600
Supplies Expense .......................................................... 2,500
Interest Expense ............................................................ 600
Insurance Expense......................................................... 900
Salaries and Wages Expense ......................................... 51,400
Utilities Expense ........................................................... 9,400
$281,000 $281,000
(d) MAQUOKETA RIVER RESORT
Income Statement
For the Three Months Ended August 31, 2017

Revenues
Rent revenue ............................................................ $88,800
Expenses
Salaries and wages expense ..................................... $51,400
Utilities expense ....................................................... 9,400
Maintenance and repairs expense ............................ 3,600
Supplies expense ...................................................... 2,500
Depreciation expense ............................................... 2,100
Insurance expense .................................................... 900
Interest expense........................................................ 600
Total expenses ................................................. 70,500
Net income........................................................................ $18,300

MAQUOKETA RIVER RESORT

Owner’s Equity Statement
For the Three Months Ended August 31, 2017

Owner’s Capital, June 1 ................................................... $ 0

Investment by owner ........................................................ $100,000
Add: Net income ............................................................. 18,300 118,300
118,300
Less: Drawings ................................................................ 5,000
Owner’s Capital, August 31 ............................................. $113,300
 MAQUOKETA RIVER RESORT
Balance Sheet
August 31, 2017

Assets
Cash ............................................................................. $ 19,600
Accounts receivable .................................................... 4,000
Supplies ....................................................................... 800
Prepaid insurance ........................................................ 5,100
Land ............................................................................. 25,000
Buildings...................................................................... $125,000
Less: Accum. depreciation—buildings ...................... 1,500 123,500
Equipment.................................................................... 26,000
Less: Accum. depreciation—equipment .................... 600 25,400
Total assets ................................................. $203,400

Liabilities and Owner’s Equity

Liabilities
Accounts payable ................................................ $ 6,500
Mortgage payable ............................................... 80,000
Unearned rent revenue ........................................ 2,600
Interest payable ................................................... 600
Salaries and wages payable ................................ 400
Total liabilities ........................................... 90,100
Owner’s equity
Owner’s capital ................................................... 113,300
Total liabilities and owner’s
equity ...................................................... $203,400