Accounting Problem

The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31.
SOLO HOTEL Trial Balance May 31, 2014 |
||
|
Debit |
Credit |
Cash |
$ 2,500 |
|
Supplies |
2,600 |
|
Prepaid Insurance |
1,800 |
|
Land |
15,000 |
|
Buildings |
70,000 |
|
Equipment |
16,800 |
|
Accounts Payable |
|
$ 4,700 |
Unearned Rent Revenue |
|
3,300 |
Mortgage Payable |
|
36,000 |
Common Stock |
|
60,000 |
Rent Revenue |
|
9,000 |
Salaries and Wages Expense |
3,000 |
|
Utilities Expense |
800 |
|
Advertising Expense |
500 |
|
|
$113,000 ======= |
$113,000 ======= |
Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the building and $3,000 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $900 are accrued and unpaid at May 31.
Instructions
• (a) Journalize the adjusting entries on May 31.
• (b) Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries.
• (c)Prepare an adjusted trial balance on May 31.
• ?
(d) Prepare an income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31.
Hint: Rent revenue is $11,500, Adjusted trial balance totals are $114,630 and Net income for May is $3,570

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Rating:
5/
Solution: Accounting Problem Solution