TAKING IT FURTHER As at June 30 2017 approximately how old a

TAKING IT FURTHER As at June 30, 2017, approximately how old are the equipment and vehicles? P3-11B Mountain Best Lodge has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 month-end adjustments: MOUNTAIN BEST LODGE Trial Balance May 31, 2017 Debit Credit Cash Prepaid insurance Supplies Land Buildings Accumulated depreciation-buildings Furniture Accumulated depreciation-furniture Accounts payable Unearned revenue Mortgage payable M. Rundle, capital M. Rundle, drawings Rent revenue $ 12,365 3,080 1,050 80,000 180,000 76,125 21,900 12,250 4,780 8,500 46,400 54,800 18,750 102,100 Advertising expense Depreciation expense Salaries expense Supplies expense Interest expense Insurance expense Utilities expense 500 7,975 49,304 5,410 7,381 4,840 13,300 $404,955 $404,955

Solution

Moutain Best Lodge Journal Entries May 31st Date Particular Amount (DR) Amount(Cr) 31st May Insurance=($5280*6/12) $            2,640.00      To Prepaid Insurance $                        2,640.00 (Being amount of six months insurance tranfer from prepaid insurance A/c ) 31st May Supplies Expenses=($1050-$760) $               290.00      To Supplies A/c $                            290.00 (Being amount of Supplies Expenses) 31st May Depreciation A/c-Building=($180000/40) $            4,500.00     To Accumulated Depreciation $                        4,500.00 (Being amount of Depreciation) 31st May Depreciation A/c-Furniture=($21000/5) $            4,200.00      To Accumulated Depreciation-Furniture $                        4,200.00 (Being amount borrowed from bank) 31st May Unearned Revenue=(40*$50) $            2,000.00     To Rent Revenue $                        2,000.00 (Being amount of unearned revenue transfer to Rent Revenue A/c) 31st May Interest=($146400*5.5%*1/12) $               671.00      To Interest Payable $                            671.00 (Being amount of Interest Payable) 31st May Salary A/c $            1,025.00     To Salary Payable $                        1,025.00 (Being amount of Salary Payable) 31st May Utility A/c $            1,250.00       To Utility Payable $                        1,250.00 (Being amount of Utility bill unrecored and unpaid) 31st May Unbilled Accounts Receivable $               950.00      To Service Revenue $                            950.00 (Being amount of Unbilled Accounts Receivable) Moutain Best Lodge Adjusted Trial Balance May 31st Heads Debit Credit Cash $         12,365.00 Prepaid Insurace=($3080-$2640) $               440.00 Supplies $               760.00 Unbilled Accounts Receivable $               950.00 Land $         80,000.00 Building $       180,000.00 Accumulated Depreciation-Building $                      80,625.00 Furniture $         21,000.00 Accumulated Depreciation-Furniture $                      16,450.00 Accounts Payable $                        4,780.00 Salary Payable $                        1,025.00 Interest Payable $                            671.00 Utility Payable $                        1,250.00 Unearned Revenue $                        6,450.00 Mortgage Payable $                   146,400.00 M.Rundle Capital $                      54,800.00 M.Rundle Drawings $         18,750.00 Rent Revenue $                   105,100.00 Advertising Expenses $               500.00 Depreciation Expense $         16,675.00 Salaries Expense $         50,329.00 Supplies Expenses $            5,700.00 Interest Expense $            8,052.00 Insurance Expense $            7,480.00 Utilities Expense $         14,550.00 Total $       417,551.00 $                   417,551.00 Moutain Best Lodge Income Statement May 31st Rent Revenue $                   105,100.00 Expenses Advertisemet $               500.00 Salaries $         50,329.00 Insurance $            7,480.00 Supplis Expenses $            5,700.00 Utilities Expenses $         14,550.00 Interest Expenses $            8,052.00 Depreciation $         16,675.00 $                   103,286.00 Net Income $                        1,814.00