The Vang Hotel opened for business on May 1, 2012. Here is its trial balance before adjustment on May 31
VANG HOTEL |
||
Debit |
Credit |
|
Cash |
$ 2,500 |
|
Prepaid Insurance |
1,800 |
|
Supplies |
2,600 |
|
Land |
15,000 |
|
Buildings |
70,000 |
|
Equipment |
16,800 |
|
Accounts Payable |
$ 4,700 |
|
Unearned Rent Revenue |
3,300 |
|
Mortgage Payable |
36,000 |
|
Common Stock |
60,000 |
|
Rent Revenue |
9,000 |
|
Salaries and Wages Expense |
3,000 |
|
Utilities Expense |
800 |
|
Advertising Expense |
500 |
|
$113,000 |
$113,000 |
Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the building and $3,000 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $900 are accrued and unpaid at May 31.
Instructions
(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.
(c) Prepare an adjusted trial balance on May 31.
(d) Prepare an income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31.
(e) Identify which accounts should be closed on May 31.