Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 25

Preparing and Analyzing the Effects of Adjusting Entries
Enchanted Forest, a large campground in South Carolina, adjusts its accounts monthly.ost guests of the campground pay at the time they check out, and the amounts collected are credited to Camper Revenue.he following information is available as a source for preparing the adjusting of entries at December 31:
1.nchanted Forest invests some of its excess cash in certificates of deposit (CDs) with its local bank.ccrued interest revenue on its CDs at December 31 is $400.one of the interest has yet been received.Debit Interest Receivable.)
2. six-month bank loan in the amount of $12,000 had been obtained on September 1.nterest is to be computed at an annual rate of 8.5 percent and is payable when the loan becomes due.
3.epreciation on buildings owned by the campground is based on a 25-year life.he original cost of the buildings was $600,000.he Accumulated Depreciation: Buildings account has a credit balance of $310,000 at December 31, prior to the adjusting entry process.he straight- line method of depreciation is used.
4.anagement signed an agreement to let Boy Scout Troop 538 of Lewisburg, Pennsylvania, use the campground in June of next year.he agreement specifies that the Boy Scouts will pay a daily rate of $15 per campsite, with a clause providing a minimum total charge of $1,475.
5.alaries earned by campground employees that have not yet been paid amount to $1,250.
6.s of December 31, Enchanted Forest has earned $2,400 of revenue from current campers who will not be billed until they check out.Debit Camper Revenue Receivable.)
7.everal lakefront campsites are currently being leased on a long-term basis by a group of senior citizens.ix months' rent of $5,400 was collected in advance and credited to Unearned Camper Revenue on October 1 of the current year.
8. bus to carry campers to and from town and the airport had been rented the first week of December at a daily rate of $40.t December 31, no rental payment has been made, although the campground has had use of the bus for 25 days.
9.nrecorded Income Taxes Expense accrued in December amounts to $8,400.his amount will not be paid until January 15.
Instructions
a.or each of the above numbered paragraphs, prepare the necessary adjusting entry (including an explanation).f no adjusting entry is required, explain why.
b.our types of adjusting entries are described at the beginning of the chapter.sing these descriptions, identify the type of each adjusting entry prepared in part a above.
c.ndicate the effects that each of the adjustments in part a will have on the following six total amounts in the campground's financial statements for the month of December.rganize your answer in tabular form, using the column headings shown below.se the letters I for increase, D for decrease, and NE for no effect.djusting entry 1 is provided as an example.

d.hat is the amount of interest expense recognized for the entire current year on the $12,000 bank loan obtained September 1
e.ompute the book value of the campground's buildings to be reported in the current year's December 31 balance sheet.Refer to paragraph 3.)