Question

QUESTIONS:

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

Based on:

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		71,200
Equipment		16,800
Accounts Payable					$  4,533
Unearned Rent Revenue					3,300
Mortgage Payable					37,200
Common Stock					59,833
Rent Revenue					9,000
Salaries and Wages Expense		3,000
Utilities Expense		800
Advertising Expense		500
		$ 113,866			$ 113,866

Other data:

1.		Insurance expires at the rate of $ 450 per month.
2.		A count of supplies shows $ 1,100 of unused supplies on May 31.
3.		(a) Annual depreciation is $ 3,000 on the building.
		(b) Annual depreciation is $ 2,400 on equipment.
4.		The mortgage interest rate is  6%. (The mortgage was taken out on May 1.)
5.		Unearned rent of $ 2,660 has been earned.
6.		Salaries of $ 740 are accrued and unpaid at May 31.

Answer 1

MOTO HOTEL
Adjustment entries
Date	Account title & explanation	Debit	Credit
1	Insurance expense	450
	Prepaid insurance		450
	(To record Insurance expires at the rate of $ 450 per month.)
2	Supplies expense	1500
	Supplies		1500
	(To record supply expense.) (2600-1100)
3a	Depreciation expense - equipment	200
	Accumulated depreciation on equipment		200
	(to record depreciation - equipment) (2400/12)
3b	Depreciation expense Building	250
	Accumulated depreciation - Building		250
	(To record depreciation - Building.) (3000/12)
4	Interest expense	186
	Interest payable		186
	(To record interest expense.) (37200*6%*1/12)
5	Unearned Rent Revenue	2660
	Rent Revenue		2660
	(To record rent revenue.)
6	Salaries expense	740
	Salaries payable		740
	(To record salaries expense.)

MOTO HOTEL
Adjusted trial balance sheet
Account title	Debit	Credit	Remarks
	Debit	Credit
Cash	2333		2333
Supplies	1,100		2600-1500
Prepaid Insurance	1,350		1800-450
Land	14,833		14,833
Buildings	71,200		71,200
Equipment	16,800		16,800
Accounts Payable		4533	4533
Unearned Rent Revenue		3,300	3,300
Mortgage Payable		37,200	37,200
Common Stock		59,833	59,833
Rent Revenue		9,000	9,000
Salaries and Wages Expense	3,000		3,000
Utilities Expense	800		800
Advertising Expense	500		500
Insurance expense	450		450
Supplies expense	1500		1500
Depreciation expense - equipment	200		200
Accumulated depreciation on equipment		200	200
Depreciation expense Building	250		250
Accumulated depreciation - Building		250	250
Interest expense	186		186
Interest payable		186	186
Salaries expense	740		740
Salaries payable		740	740
	115242	115242