Problem
The Moto Hotel opened for business on May 1st, 2017. Here is a trial balance before adjustment on May 1st 2017. Here is a trial balance before adjustment on May 31st
|
Debit
|
Credit
|
|
Cash
|
2500
|
|
|
supplies
|
2600
|
|
|
prepaid insurance
|
1800
|
|
|
land
|
15000
|
|
|
buildings
|
70000
|
|
|
equipment
|
16800
|
|
|
accounts payable
|
|
4700
|
|
unearned rent revenue
|
|
3300
|
|
mortgage payable
|
|
36000
|
|
common stock
|
|
60,000
|
|
rent revenue
|
|
9000
|
|
salaries and wages expense
|
3000
|
|
|
utilities expense
|
800
|
|
|
advertising expense
|
500
|
|
|
113,000
|
113,000
|
Other data:
1. insurance expires at the rate of $450/month.
2. a count of supplies shows $1050 of unused supplies on may 31
3. a. annual depreciation is $3600 on the building
b. annual depreciation is $3,000 on equipment.
4. the mortgage interest rate is 6% (The mortgage was taken out on May 1).
5. unearned rent of $2500 has been earned
6. salaries of $900 are accrued and unpaied at May 31.
Part 1:
JOurnalize the adjusting entries on May 31.
Part 2:
Prepare a ledger using T-Accounts. Enter the trial balance amounds and post the adjusting entries.
Part 3:
Prepare an adjusted trial balance on May 31.
Part 4:
Prepare an Income Statement for the month of May.
Part 5: prepare a retained earnings statement for the MOnth of May.
Part 6: Prepare a classified Balance Sheet at May 31.
Part 7: identify which accounts should be closed on May 31.