A. Prepare the necessary journal entries to record the transactions below. Use t
ID: 2498062 • Letter: A
Question
A. Prepare the necessary journal entries to record the transactions below. Use the chart of accounts shown in Table 1.
B. Begining with the June 1 account balances shown in Table 2, create a worksheet which shows the ending balances in all accounts after the monthly journal entries have been posted.
C. Journalize the closing entries.
D. Create a post-closing trial balance.
E. Use info to create Income Statement & Balance Sheet.
Trasactions:
1. During June, seasonal plants and paint costs $1,500,000 paid in cash. (Use maintenance expense).
2. Season passes are sold for $600,000 cash.
3. Water chemical inventory used - $250,000
4. Water Saline inventory used - $30,000
5. Cash admissions - $2,500,000
6. Concession sales totaled $700,000 in cash for goods costing $250,000
7. Cash salaries paid for the month. You may ignore withholding and taxes. Expense Salary Operating - $250,000 and Expense Salary Administrative - $225,000
8. Bought animal food and supplements costing $60,000 on account to feed the animals in the amusement park. $100,000 of food was used during the month.
9. The cost of utilities for the month totaled $25,000 which was immediately paid.
10. At the end of the month, depreciation on the buildings and equipment is recorded. The buildings and equipment have an expected useful life of 35 years, and a salvage value of $5,000,000. Use straight line depreciation techniques to depreciate the building and equipment.
11. June interest on the note payable is accrued. The annual interest rate on the note payable is 6% and the payment is due on January 1 of each year.
12. Season ticket revenue is recorded for the month.
13. Prepaid insurance is adjusted. The balance as of June 1 represents 8 months of remaining coverage.
Table 1
Assets
Cash
Prepaid Insurance
Inventory: administration
Inventory: animal food
Inventory: concession
Inventory: finished goods
Inventory: raw materials
Inventory: water chemicals
Inventory: water saline
Inventory: work in process
Manufacturing Overhead
Building and Equipment
Liabilities
Accounts payable
Interest payable
Notes payable
Stockholders' equity
Stock
Retained earnings
Income
Admission Revenues
Concession Sales
Expenses
Cost of goods sold
Animal food expense
Depreciation expense
Insurance expense
Interest expense
Maintenance expense
Salaries expense-Operation
Salaries expense-Administration
Selling & administrative expense
Utilities expense
Table 2-Account Balances
Assets
Cash
Prepaid Insurance
Inventory: administration
Inventory: animal food
Inventory: concession
Inventory: finished goods
Inventory: raw materials
Inventory: water chemicals
Inventory: water saline
Inventory: work in process
Manufacturing Overhead
Building and Equipment
LandLiabilities
Accounts payable
Interest payable
Notes payable
Stockholders' equity
Stock
Retained earnings
Income summaryIncome
Admission Revenues
Concession Sales
Plush Toy SalesExpenses
Cost of goods sold
Animal food expense
Depreciation expense
Insurance expense
Interest expense
Maintenance expense
Salaries expense-Operation
Salaries expense-Administration
Selling & administrative expense
Utilities expense
Water treatment expenseExplanation / Answer
P
Transaction Account Title Debit Credit 1. Maintenance expense 15,00,000 Cash 15,00,000 2. Cash 600,000 Admission revenues 600,000 3. Water treatment expense 250,000 Inventory- water chemicals 250,000 4. Water treatment expense 30,000 Inventory - water saline 30,000 5. Cash 2,500,000 Admissions revenue 2,500,000 6. Cash 700,000 Concession sales 700,000 Cost of goods sold 250,000 Inventory- concessions 250,000 7. Operating salary expense 250,000 Administration salary expense 225,000 Cash 475,000 8. Inventory: animal food 60,000 Accounts payable 60,000 Animal food expense 100,000 Inventory: animal food 100,000 9. Utilities expense 25,000 Cash 25,000 10. Depreciation expense 600,000 Accumulated depreciation - bldg. & equip. 600,000 11. Interest expense 115,000 Interest payable 115,000 12. Insurance expense 500,000 Prepaid insurance 500,000