Flint Hills Resort opened for business on June1 with eight air conditioned units. It's trail balance before adjustment on August 31 is presented here.
Debit Credit
Cash 24600
Prepaid Insurance 5400
Supplies 4300
Land 40000
Cottages 132000
Furniture 36000
Accounts Payable 6500
Unearned service revenue 6800
Mortgage payable 120000
Common stock 100000
Dividends 5000
Rent revenue 80000
Salaries expense 53000
Utilities expense 9400
Repair expense 3600
Total 313,300 313,300
1) insurance expires at the rate of 450 per month
2) a count of supplies on August 21 shows 700 of supplies on hand
3) annual depreciation is 4,400 on cottages and 4,000 on furniture
4) unearned rent of 5,000 was earned prior to August 31
5) salaries of 600 were unpaid at August 31
6) rentals of 1,200 were due from tenants at August 31 (use accounts receivable)
7) the mortgage interest rate is 8% per year. (the mortgage was taken out August 31)
Hint: adjusting trial balance totals are 318,000 and net income for August is 11,750.
