Question Completion:
(a) Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries.
(b) Prepare an adjusted trial balance on May 31.
(c) Prepare an income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31.
(d) Identify which accounts should be closed on May 31.
The Moto Hotel
(a) Ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries:
Accounts Debit Credit
Cash
Unadjusted Trial balance $ 2,333
Accounts Debit Credit
Supplies
Unadjusted Trial balance $2,600
Supplies expense $1,500
Balance $1,100
Accounts Debit Credit
Prepaid Insurance
Unadjusted Trial balance $1,800
Insurance Expense 450
Balance c/d $1,350
Accounts Debit Credit
Land
Unadjusted Trial balance $14,833
Accounts Debit Credit
Buildings
Unadjusted Trial balance $71,200
Accounts Debit Credit
Equipment
Unadjusted Trial balance $16,800
Accounts Debit Credit
Accounts Payable
Unadjusted Trial balance $ 4,533
Accounts Debit Credit
Salaries and Wages Payable
Salaries and Wages $740
Accounts Debit Credit
Unearned Rent Revenue
Unadjusted Trial balance $3,300
Rent Revenue $2,660
Balance c/d $640
Accounts Debit Credit
Mortgage Payable
Unadjusted Trial balance $37,200
Accounts Debit Credit
Common Stock
Unadjusted Trial balance $59,833
Accounts Debit Credit
Rent Revenue
Unadjusted Trial balance $9,000
Unearned Rent Revenue $2,660
Balance c/d $11,660
Accounts Debit Credit
Salaries and Wages Expense
Unadjusted Trial balance $3,000
Salaries & Wages Payable 740
Balance c/d $3,740
Accounts Debit Credit
Utilities Expense
Unadjusted Trial balance $800
Accounts Debit Credit
Advertising Expense
Unadjusted Trial balance $500
Accounts Debit Credit
Insurance Expense
Prepaid Insurance $450
Accounts Debit Credit
Supplies Expense
Supplies $1,500
Accounts Debit Credit
Depreciation Expense - Building
Accumulated depreciation $3,000
Accounts Debit Credit
Accumulated Depreciation Expense - Building
Depreciation Expense $3,000
Accounts Debit Credit
Depreciation Expense - Equipment
Accumulated depreciation $2,400
Accounts Debit Credit
Accumulated Depreciation Expense - Equipment
Depreciation Expense $2,400
Accounts Debit Credit
Mortgage Interest Expense
Mortgage Interest Payable $186
Accounts Debit Credit
Mortgage Interest Payable
Mortgage Interest Expense $186
(b) Adjusted trial balance on May 31:
Debit Credit
Cash $ 2,333
Supplies 1,100
Prepaid Insurance 1,350
Land 14,833
Buildings 71,200
Equipment 16,800
Accounts Payable $ 4,533
Salaries & Wages Payable 740
Mortgage Interest Payable 186
Unearned Rent Revenue 640
Mortgage Payable 37,200
Common Stock 59,833
Rent Revenue 11,660
Salaries and Wages Expense 3,740
Utilities Expense 800
Advertising Expense 500
Insurance Expense 450
Supplies Expense 1,500
Depreciation Exp. - Building 3,000
Depreciation Exp-Equipment 2,400
Mortgage Expense 186
Accumulated Depreciation- Building 3,000
Accumulated Depreciation- Equipment 2,400
Totals $120,192 $120,192
(c) Income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31:
Income Statement for the month ended May 31:
Rent Revenue 11,660
Salaries and Wages Expense 3,740
Utilities Expense 800
Advertising Expense 500
Insurance Expense 450
Supplies Expense 1,500
Depreciation Exp. - Building 3,000
Depreciation Exp-Equipment 2,400
Mortgage Expense 186 (12,576)
Net Loss $916
Statement of Retained Earnings:
Net Loss ($916)
Balance Sheet as of May 31:
Assets:
Current assets:
Cash $ 2,333
Supplies 1,100
Prepaid Insurance 1,350 $4,783
Long-term assets:
Land 14,833
Buildings 71,200
Accumulated depreciation (3,000) 68,200
Equipment 16,800
Accumulated depreciation (2,400) 14,400 $97,433
Total assets $102,216
Liabilities + Equity:
Current Liabilities:
Accounts Payable $ 4,533
Salaries & Wages Payable 740
Mortgage Interest Payable 186
Unearned Rent Revenue 640 $6,099
Mortgage Payable 37,200
Total liabilities $43,299
Common Stock 59,833
Net Loss (916) $58,917
Total Liabilities + Equity $102,216
(d) Identification of accounts to be closed on May 31:
Rent Revenue 11,660
Salaries and Wages Expense 3,740
Utilities Expense 800
Advertising Expense 500
Insurance Expense 450
Supplies Expense 1,500
Depreciation Exp. - Building 3,000
Depreciation Exp-Equipment 2,400
Mortgage Expense 186
Explanation:
a) Data:
MOTO HOTEL Trial Balance as of 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
Totals $113,866 $113,866
