Wildhorse Travel Court was organized on July 1, 2024, by Betty Johnson. Betty is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Betty prepared the following income statement for her fourth quarter, which ende June 30, 2025. Revenues Wildhorse Travel Court Income Statement For the Quarter Ended June 30, 2025 Rent revenue Operating expenses Advertising expense Salaries and wages expense Utilities expense Depreciation expense Maintenance and repairs expense Total operating expenses Net income $3,830 84,370 14,600 945 2,925 4,330 $216,900 96,400 Betty suspected that something was wrong with the statement because net income had never exceeded $30,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. u then make inquiries and discover the following. $120,500 You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance contains the following additional selected balances at June 30, 2025. upplies $8,710 repaid Insurance 14,900 otes Payable Wildhorse rental revenues include advanced rental payments received for summer occupancy, in the amount of $57,1 There were $1,835 of supplies on hand at June 30. Prepaid insurance resulted from the payment of a 1-year policy on April 1, 2025. The mail in July 2025 brought the following bills: advertising for the week of June 24, $115; repairs made June 18, $4,8 and utilities for the month of June, $220. Wage expense is $320 per day. At June 30, 4 days' wages have been incurred but not paid. The note payable is a 6% note dated May 1, 2025, and due on July 31, 2025. Income tax of $14,325 for the quarter is due in July but has not yet been recorded.
Wildhorse Travel Court was organized on July 1, 2024, by Betty Johnson. Betty is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Betty prepared the following income statement for her fourth quarter, which ende June 30, 2025. Revenues Wildhorse Travel Court Income Statement For the Quarter Ended June 30, 2025 Rent revenue Operating expenses Advertising expense Salaries and wages expense Utilities expense Depreciation expense Maintenance and repairs expense Total operating expenses Net income $3,830 84,370 14,600 945 2,925 4,330 $216,900 96,400 Betty suspected that something was wrong with the statement because net income had never exceeded $30,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. u then make inquiries and discover the following. $120,500 You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance contains the following additional selected balances at June 30, 2025. upplies $8,710 repaid Insurance 14,900 otes Payable Wildhorse rental revenues include advanced rental payments received for summer occupancy, in the amount of $57,1 There were $1,835 of supplies on hand at June 30. Prepaid insurance resulted from the payment of a 1-year policy on April 1, 2025. The mail in July 2025 brought the following bills: advertising for the week of June 24, $115; repairs made June 18, $4,8 and utilities for the month of June, $220. Wage expense is $320 per day. At June 30, 4 days' wages have been incurred but not paid. The note payable is a 6% note dated May 1, 2025, and due on July 31, 2025. Income tax of $14,325 for the quarter is due in July but has not yet been recorded.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:1.
2.
3.
4.
5.
Wildhorse Travel Court was organized on July 1, 2024, by Betty Johnson. Betty is a good manager but a poor accountant. From the
trial balance prepared by a part-time bookkeeper, Betty prepared the following income statement for her fourth quarter, which ended
June 30, 2025.
6.
Revenues
7.
Supplies
Prepaid Insurance
Notes Payable
Wildhorse Travel Court
Income Statement
For the Quarter Ended June 30, 2025
Rent revenue
Operating expenses
Advertising expense
Salaries and wages expense
Utilities expense
Depreciation expense
Maintenance and repairs expense
Total operating expenses
Net income
You then make inquiries and discover the following.
$3,830
84,370
14,900
945
14,600
2,925
4,330
Betty suspected that something was wrong with the statement because net income had never exceeded $30,000 in any one quarter.
Knowing that you are an experienced accountant, she asks you to review the income statement and other data.
$216,900
You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance
contains the following additional selected balances at June 30, 2025.
$8,710
96,400
$120,500
Wildhorse rental revenues include advanced rental payments received for summer occupancy, in the amount of $57,120.
There were $1,835 of supplies on hand at June 30.
Prepaid insurance resulted from the payment of a 1-year policy on April 1, 2025.
The mail in July 2025 brought the following bills: advertising for the week of June 24, $115; repairs made June 18, $4,815;
and utilities for the month of June, $220.
Wage expense is $320 per day. At June 30, 4 days' wages have been incurred but not paid.
The note payable is a 6% note dated May 1, 2025, and due on July 31, 2025.
Income tax of $14,325 for the quarter is due in July but has not yet been recorded.
Transcribed Image Text:No. Date Account Titles and Explanation
1.
7.
2.
8.
3.
9.
4.
5.
6.
10.
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Nov.
30
Debit
Credit
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