3-2A

a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31
Date Description Ref Debit Credit
Aug 31 Insurance expense 722 $900 300*3
Prepaid insurance 130 $900

Aug 31 Supplies expense 631 $2400 3300-900

Supplies 126 $2400

Depreciation Expense -
620 $1125
Aug 31 Building 4500*1/4
Accumulated
144
depreciation-Building $1125

Depreciation Expense -
620 $600
Aug 31 Equipment 2400*1/4
Accumulated
150
depreciation-equipment $600

Aug 31 Unearned Rent Revenue 208 $4100

Rent revenue 429 $4100

Aug 31 Salaries Expense 726 $400

Salaries Payable 212 $400

Aug 31 Account receivable 112 $3700

Rent Revenue 429 $3700

Aug 31 Interest expense 718 $600 80000*9%*1/12

Interest Payable 230 $600

B) Prepare a ledger using the three-column form of account. Enter the trial balance
amounts and post the adjusting entries.
Supplies No.126
Ref Debi Credi Balanc
Date Explanation . t t e Equipment No.157
Aug Explan Ref Debi
31 J1 3.300 Date ation . t Credit Balance
Aug Adjusting Aug Final
31 entry J2 2400 900 31 Balace J1 26.000

Prepaid Insurance No.130 Account Payable No.201

 Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Final
31- Balanc
th8 J1 6.000 31-th8 e J1 6.500
31- Adjusting
th8 entry J2 1200 4800

Land No.140 Unearned Rent Revenue No.208

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
31-
th8 J1 2.500 31-th8 J1 7.400
Adjusti
ng
31-th8 Entry J2 4100 3300

Mortgage Payable No.275 Share Capital-Ordinary No.311

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
31-
th8 J1 80.000 31-th8 J1 100.000

Dividends No.332 Rent Revenue No.429

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
31-
th8 J1 5.000 31-th8 J1 80.000

Maintenance and Repairs Expense No.622 Salaries and Wages Expense No.726
Date Explanation Ref Debi Credi Balanc Date Explan Ref Debi Credit Balance
 . t t e ation . t
31-
th8 J1 3.600 31-th8 J1 51.000
Adjusti
ng
31-th8 Entry J2 400 50400

Utilities Expense No.732 Accounts Receivable No.112

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Adjusti
31- ng
th8 J1 9.400 31-th8 Entry J2 3700 3.700

Accumulated Depreciation-Buildings No.144 Accumulated Depreciation-Equipment No.158

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Adjusti
31- Adjusting ng
th8 Entry J2 1125 1.125 31-th8 Entry J2 600 600

Salaries and Wages Payable No.212 Interest Payable No.230

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Adjusti
31- Adjusting ng
th8 Entry J2 400 400 31-th8 Entry J2 600 600
 Supplies Expenses No.631 Depreciation Expense No.711
Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Adjusti
31- Adjusting ng
th8 Entry J2 2400 2.400 31-th8 Entry J2 1725 1.725

Interest Expense No.718 Insurance Expense No.722

Ref Debi Credi Balanc Explan Ref Debi
Date Explanation . t t e Date ation . t Credit Balance
Adjusti
31- Adjusting ng
th8 Entry J2 600 600 31-th8 Entry J2 1200 1.200

d) Prepare an income statement and a retained earnings statement for the 3 months
ending August 31 and a statement of financial position as of August 31.
Amount Amount
Assets s s Liabilities Amounts2 Amounts3
Current Assets Current Liabilities
Cash 19.600 Accounts Payable 6.500
Accounts
Receivable 3.700 Interest Payable 600
Supplies 900 Unearned Rent Revenue 3.300
Salaries and Wages
Prepaid Insurance 4.800 29.000 Payable 400 10.800

Non Current Assets Non Current Liabilities

Land 25.000 Mortgage Payable 80.000
Buildings 125.000
Accumulated
Depreciation 1.125 123.875 Shareholders equity
Equipment 26.000 Share Capital - Ordinary 100.000
Accumulated
Depreciation 600 25.400 Retained Earnings 12.475 112.475
Total Assets 203.275 Total Liabilities & Equity 203.275