Question

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

IVANHOE HOTEL Trial Balance May 31, 2022
		Debit			Credit
Cash		$ 2,613
Supplies		2,600
Prepaid Insurance		1,800
Land		15,113
Buildings		70,000
Equipment		16,800
Accounts Payable					$ 4,813
Unearned Rent Revenue					3,300
Mortgage Payable					36,000
Common Stock					60,113
Rent Revenue					9,000
Salaries and Wages Expense		3,000
Utilities Expense		800
Advertising Expense		500
		$113,226			$113,226

Other data:

1.		Insurance expires at the rate of $360 per month.
2.		A count of supplies shows $1,180 of unused supplies on May 31.
3.		(a) Annual depreciation is $2,760 on the building.
		(b) Annual depreciation is $2,160 on equipment.
4.		The mortgage interest rate is 5%. (The mortgage was taken out on May 1.)
5.		Unearned rent of $2,670 has been earned.
6.		Salaries of $710 are accrued and unpaid at May 31.

Prepare an adjusted trial balance on May 31.

Answer 1

No.	Date	Accounts and Explanation	Debit	Credit
1	May 31st	Insurance expense	$360	-
		Prepaid insurance	-	$360
2	May 31st	Supplies expense	$1,420	-	($2,600 - $1,180)
		Supplies	-	$1,420
3(a)	May 31st	Depreciation expense - Building	$230	-	($2,760 / 12)
		Accumulated depreciation - Building	-	$230
3(b)	May 31st	Depreciation expense - Equipment	$180	-	($2,160 / 12)
		Accumulated depreciation - Equipment	-	$180
4	May 31st	Interest expense	$150	-	($36,000 X 5% X 1/12)
		Interest payable	-	$150
5	May 31st	Unearned rent	$2,670	-
		Rent revenue	-	$2,670
6	May 31st	Salaries expense	$710	-
		Salaries payable	-	$710

Adjusted trial balance:

	Debit	Credit
Cash	$2,613	-
Supplies	$1,180	-
Prepaid expenses	$1,440	-
Land	$15,113	-
Building	$70,000	-
Equipment	$16,800	-
Accounts payable	-	$4,813
Accumulated depreciation - Building	-	$230
Accumulated depreciation - Equipment	-	$180
Unearned rent revenue	-	$630
Mortgage payable	-	$36,000
Salaries and Wages payable	-	$710
Interest payable	-	$150
Common stock	-	$60,113
Rent revenue	-	$11,670
Salaries and Wages expense	$3,710	-
Utilities expense	$800	-
Advertising expense	$500	-
Supplies expense	$1,420	-
Depreciation expense	$410	-
Insurance expense	$360	-
Interest expense	$150	-
	$114,496	$114,496