The Moto Hotel opened for business on May 1, 2025. Here is its trial balance before adjustment on May 31.

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 notes payable interest rate is $6\%$. (The note was taken out on May 1 and has a 1 -year life. Interest and principal are to be repaid at the maturity of the note.)
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 (1) an income statement and (2) a retained earnings statement for the month of May and (3) a classified balance sheet at May 31 .

e. Identify which accounts should be closed on May 31 .

Transcribed Image Text:

Cash Supplies Prepaid Insurance Land Buildings Equipment Moto Hotel Trial Balance May 31, 2025 Debit $ 2,500 2,600 1,800 15,000 70,000 16,800 Credit