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In: Accounting

The Crane Hotel opened for business on May 1, 2022. Here is its trial balance before...

The Crane Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.

CRANE HOTEL
Trial Balance
May 31, 2022

Debit

Credit

Cash

 $ 2,403

Supplies

 2,600

Prepaid Insurance

 1,800

Land

 14,903

Buildings

 70,000

Equipment

 16,800

Accounts Payable

 $ 4,603

Unearned Rent Revenue

 3,300

Mortgage Payable

 36,000

Common Stock

 59,903

Rent Revenue

 9,000

Salaries and Wages Expense

 3,000

Utilities Expense

 800

Advertising Expense

500

$112,806

$112,806


Other data:

1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,160 of unused supplies on May 31.
3. (a) Annual depreciation is $3,480 on the building.
(b) Annual depreciation is $2,880 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,580 has been earned.
6.

Salaries of $760 are accrued and unpaid at May 31.

Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries presented in the previous question.)

Solutions

Expert Solution

Ledgers using T-Accounts - Entering trial balance amounts and posting adjusting entries.

T-Accounts
Cash Supplies
Beg. Bal. $2,403 Beg. Bal. $2,600 May. 31 $1,440
May. 31 $1,160
Prepaid Insurance Land
Beg. Bal. $1,800 May. 31 $450 Beg. Bal. $14,903
Buildings Equipment
Beg. Bal. $70,000 Beg. Bal. $16,800
Accounts Payable Unearned Rent Revenue
Beg. Bal. $4,603 May. 31 $2,580 Beg. Bal. $3,300
Mortgage Payable Common Stock
Beg. Bal. $36,000 Beg. Bal. $59,903
Rent Revenue Salaries and Wages Expense
May. 31 $9,000 May. 31 $3,000
May. 31 $2,580 May. 31 $760
Utilities Expense Advertising Expense
May. 31 $800 May. 31 $500
Insurance Expense Supplies Expense
May. 31 $450 May. 31 $1,440
Accumulated Depreciation - Building Accumulated Depreciation - Equipment
May. 31 $3,480 May. 31 $2,880
Depreciation Expense - Building Depreciation Expense - Equipment
May. 31 $3,480 May. 31 $2,880
Interest Payable Interest Expense
May. 31 $180 May. 31 $180
Salaries and Wages Payable
May. 31 $760
* $2,600 - $1,160 = $1,440.
** $36,000*6/100*1/12 = $180

ekkarill92 answered 1 year ago
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