Preparation of Adjusting Entries and Financial Statements.
Leisure Centre Ltd. Was set up on July 1, 20XX. Its trial balance on July 31, 20XX is as follows:
LEISURE CENTRE LIMITED
Trial Balance, July 31, 20XX
|
Account |
Debit |
Credit |
|
Swimming Pool |
12,000 |
|
|
Tennis Court |
9,600 |
|
|
Supplies |
3,280 |
|
|
Debtors |
2,910 |
|
|
Cash |
940 |
|
|
Prepaid Insurance |
1,200 |
|
|
Creditors |
1,290 |
|
|
Unearned Revenue |
2,100 |
|
|
Share Capital |
15,000 |
|
|
Dividends |
800 |
|
|
Revenue from Services |
15,540 |
|
|
Salaries Expense |
2,910 |
|
|
Telephone Expense |
290 |
|
|
33,930 |
33,930 |
The following additional information is available:
- The swimming pool has an estimated life of five years and the tennis court has an estimated life of 8 years. Neither has any scrap value.
- The inventory of supplies on July 31, Rs.1,190
- Subscription revenue of Rs.1,200 is due from members who have been admitted on a provisional basis.
- Unearned subscription includes an amount of Rs.300 for July.
- Staff salaries for the last week totalling Rs.1,290 have not been paid.
- The local electricity company sent a bill for Rs.280 for July after the close of the month’s transactions.
- Insurance premium of Rs.1,200 was paid on one year policy effective from July 1.
Required
- Prepare adjusting entries and post them to the T accounts
- Prepare an adjusted trial balance, a profit and loss account, a statement of retained earnings and a balance sheet