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    The Olathe Hotel opened for business on May 1, 2010. Here is its trial balance before adjustment on May 31.?
    OLATHE HOTEL Trial Balance May 31, 2010 Debit Credit Cash $2,500 Prepaid Insurance 1,800 Supplies 2,600 Land 15,000 Lodge 70,000 Furniture 16,800 Accounts Payable $4,700 Unearned Rent Revenue 3,300 Mortgage Payable 36,000 Common Stock 60,000 Rent Revenue 9,000 Salaries Expense 3,000 Utilities Expense 800 Advertising Expense 500 $113,000 $113,000 Other data: 1. Insurance expires at the rate of $300 per month. 2. A count of supplies shows $1,050 of unused supplies on May 31. 3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture. 4. The mortgage interest rate is 7%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,500 has been earned. 6. Salaries of $750 are accrued and unpaid at May 31. step 1: journalize entries step 2: Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries. step 3:Complete the Adjusted Trial Balance as of May 31. step 4: Complete the income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31. step 5: Indicate which accounts should be closed on May 31.
    a few seconds ago 1 Answer

    Best Answer

    1. Insurance expires at the rate of $300 per month. Dr Insurance Expense 300 Cr Prepaid Insurance 300 2. A count of supplies shows $1,050 of unused supplies on May 31. Dr Supplies Expense 1,550 Cr Supplies 1,550 3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture. Dr Depreciation Expense, Lodge 300 Cr Accumulated Depreciation, Lodge 300 Dr Depreciation Expense, Furniture 250 Cr Accumulated Depreciation, Furniture 250 4. The mortgage interest rate is 7%. (The mortgage was taken out on May 1.) Dr Interest Expense 210 Cr Interest Payable 210 5. Unearned rent of $2,500 has been earned. Dr Unearned Rent Revenue 2,500 Cr Rent Revenue 2,500 6. Salaries of $750 are accrued and unpaid at May 31. Dr Salaries Expense 750 Cr Salaries Payable 750 step 2: Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries. step 3:Complete the Adjusted Trial Balance as of May 31. I'll let you try these two yourself. step 4: Complete the income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31. Income Statement Rent Revenue. . . . . . . . . . . . . . . . . . .. . . $11,500 Expenses: Salaries Expense. . . . . . . . ... .$3,750 Utilities Expense. . . . . . . . . . . .. . 800 Advertising Expense. . . . . . . . . . . 500 Insurance Expense. . . . . . . . . . . . 300 Supplies Expense . . . . . . . . . . . 1,550 Depreciation Expense, Lodge . . . . .300 Depreciation Expense, Furniture. . . 250 Interest Expense . . . . . . . . . . . . . .210 Total Expenses.. . . . . . . . . . . . . . . . . . . . ..7,660 Net Income. . . . . . . . . . . . . . . . . . . . . . . .$3,840 Balance Sheet Current Assets Cash. . . . . . . . . . . . . . . . . . . . ....$2,500 Prepaid Insurance. . . . . . . . . . . .....1,500 Supplies. . . . . . . . . . . . . . . . . . .....1,050 Total Current Assets . . . . . . . . . . . . . . . . . . .5,050 Property, Plant, and Equipment Land. . . . . . . . . . . . . . . . . . . . ...... . . . . . ..15,000 Lodge. . . . . . . . . . . . . . . . . . . .....70,000 Less: Accumulated Depreciation. . . . .300.. . 69,700 Furniture. . . . . . . . . . . . . . . . . . . .16,800 Less: Accumulated Depreciation. . . . .250.. . 16,550 Total Assets. . . . . . . . . . . . . . . . . . . . . . . 106,300 Liabilities: Accounts Payable. . . . . . . . . . .. . . 4,700 Interest Payable. . . . . . . . . . . . . . . . .210 Salaries Payable. . . . . . . . . . . . . . . . 750 Unearned Rent Revenue. . . . . . . . . . .800 Mortgage Payable. . . . . . . . . . . . .36,000 Total Liabilities. . . . . . . . . . . . . . . . . . . . . . 42,460 Stockholders' Equity: Common Stock. . . . . . . . . . . . . . .60,000 Retained Earnings. . . . . . . . . . . . . .3,840. . 63,840 Total Liabilities and Stockholders' Equity. . . . . . . . . . . . . . . . $106,300 step 5: Indicate which accounts should be closed on May 31. All Revenue and Expense accounts should be closed
    a few seconds ago

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