Question

Problem 3-02A a-d (Part Level Submission) Cullumber's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. CULLUMBER'S HOTEL Trial Balance May 31, 2020 Account Number Debit Credit 101 Cash $ 3,400 126 Supplies 2,100 130 Prepaid Insurance 3,000 140 Land 15,000 141 Buildings 60,600 149 Equipment 15,600 201 Accounts Payable $ 4,800 208 Unearned Rent Revenue 3,300 275 Mortgage Payable 40,000 301 Owner’s Capital 41,200 429 Rent Revenue 15,100 610 Advertising Expense 550 726 Salaries and Wages Expense 3,200 732 Utilities Expense 950      $104,400 $104,400 In addition to those accounts listed on the trial balance, the chart of accounts for Cullumber’s Hotel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Prepaid insurance is a 1-year policy starting May 1, 2020. 2. A count of supplies shows $700 of unused supplies on May 31. 3. Annual depreciation is $3,636 on the buildings and $1,560 on equipment. 4. The mortgage at an annual interest rate is 6%. (The mortgage was taken out on May 1.) 5. Two-thirds of the unearned rent revenue has been earned. 6. Salaries of $700 are accrued and unpaid at May 31.

(a) Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. May 31 2. May 31 3. May 31 4. May 31 5. May 31 6. May 31 Click if you would like to Show Work for this question: Open Show Work

Answer 1

Adjusting entries on May 31

In the books of Cullumber's Hotel
No.	Date	Account titles and explanation	Debit (in $)	Credit (in $)
1	31st May	722 - Insurance expense	250
		130 - Prepaid Insurance		250
		(1 month's proportionate amount charged to Insurance expenses)
2	31st May	631 - Supplies expense	1,400
		126 - Supplies		1,400
		(Amount of used supplies charged to Supplies expenses)
3	31st May	619 - Depreciation expense	433
		142 - Accumulated Depreciation - Building		303
		150 - Accumulated Depreciation - Equipment		130
		(1 month's proportionate depreciation charged to depreciation expense)
4	31st May	718 - Interest expense	200
		230 - Interest payable		200
		(1 month's interest on Mortgage charged)
5	31st May	208 - Unearned Rent revenue	2,200
		429 - Rent revenue		2,200
		(2/3 of the unearned rent revenue accounted for as income)
6	31st May	726 - Salaries and wages expenses	700
		212 - Salaries and wages payable		700
		(Salary accrued and payable)