The following account balances were taken from the trial balance of the Sno-Top
ID: 2434607 • Letter: T
Question
The following account balances were taken from the trial balance of the Sno-Top Ski Resort on December 31, 2010. For the month ended December 31, 2010, make the necessary adjusting entries using the account balances along with the added information supplied below. (Assume normal DR or CR balances.)Prepaid Insurance $4,080
Office Supplies 700
Storage Revenues 6,000
Salaries Expense 203,900
Ski lifts 325,000
Accumulated Depr. – lifts 73,000
Note payable (12%, due in 7 months) 450,000
1. Monthly insurance expense amounts to $4000.
2. One-third of the storage revenue fees collected was for ski storage during the next year.
3. Employees have earned $5000 for working in December but will not be paid until January.
4. A physical inventory determined that $150 of the office supplies were still on hand.
5. Depreciation on the ski lifts for the month amounts to $8,000.
6. At month-end they did not pay the monthly interest owed on their note payable.
Explanation / Answer
1. Insurance expens $4,000 Prepaid Insurance $4,000 (To record Insurance expense) 2. Storage revenue $2,000 Unearned storage revenue $2,000 (To record unearned storage revenue) 3. Salaries expense $5,000 Salaries Payable $5,000 (To record salaries payable for December) 4. Office supplies expense $550 Office supplies $550 (To record supplies consumed during the month) 5. Deperciation expense-lifts $8,000 Accumulated Depericiation- lifts $8,000 (To record depericiation on ski- lifts) 6. Interest Expenses $4,500 Interest payable - notes payable $4,500 ( To record interest due on notes payable)