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In: Accounting

The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before...

The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31.

MOTO HOTEL
Trial Balance
May 31, 2017

Debit

Credit
Cash $ 2,333
Supplies 2,600
Prepaid Insurance 1,800
Land 14,833
Buildings 67,600
Equipment 16,800
Accounts Payable $ 4,533
Unearned Rent Revenue 3,300
Mortgage Payable 33,600
Common Stock 59,833
Rent Revenue 9,000
Salaries and Wages Expense 3,000
Utilities Expense 800
Advertising Expense

500

$110,266

$110,266


Other data:

1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,070 of unused supplies on May 31.
3. (a) Annual depreciation is $3,840 on the building.
(b) Annual depreciation is $3,240 on equipment.
4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,630 has been earned.
6. Salaries of $730 are accrued and unpaid at May 31.

(a) Prepare a ledger using T-accounts. Enter the trial balance amounts and post the

adjusting entries.

(b) Prepare an adjusted trial balance on May 31.

(c) Prepare an income statement and a retained earnings statement for the month of May

and a classified balance sheet at May 31.

(d) Identify which accounts should be closed on May 31.

Solutions

Expert Solution

ekkarill92 answered 2 months ago
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