(Adjusting Entries) Uhura Resort opened for business on June 1 with eight air-conditioned units. Its trial...

(Adjusting Entries)

Uhura Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows (in thousands).

Uhura Resort

Trial Balance

August 31, 2022

	Debit	Credit
cash	AED 19600
prepaid insurance	4500
supplies	2600
land	20000
building	120000
equipment	16000
accounts payable		AED 4500
unearned rent revenue		4600
mortgage payable		50000
share capital- ordinary		100000
retained earnings		0
dividends	5000
rent revenue		86200
salaries and wages expenses	44800
utilities expense	9200
maintenance and repairs expense	3600
	AED 245300	AED 245300

Other data:

1. The balance in prepaid insurance is a 1-year premium paid on June 1, 2022.

2. An inventory count on August 31 shows AED650 of supplies on hand.

3. Annual depreciation rates are buildings (4%) and equipment (10%). Residual value is estimated to be 10% of cost.

4. Unearned rent revenue of AED3,800 should be recognized as revenue prior to August 31.

5. Salaries and wages of AED375 were unpaid at August 31.

6. Rentals of AED800 were due from tenants at August 31.

7. The mortgage note is dated 1/1/2022. The mortgage interest rate is 8% per year.

Instructions

1. Journalize the adjusting entries on August 31 for the 3-month period June 1– August 31. (Omit explanations.)

2. Prepare an adjusted trial balance on August 31.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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