The Skyline Motel opened for business on May 1, 2020. Its trial balance before adjustment on May

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The Skyline Motel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows.

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In addition to those accounts listed on the trial balance, the chart of accounts for Skyline Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation?Buildings, No. 150 Accumulated Depreciation?Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data:

  1. Prepaid insurance is a 1-year policy starting May 1, 2020.
  2. A count of supplies shows $750 of unused supplies on May 31.
  3. Annual depreciation is $3,000 on the buildings and $1,500 on equipment.
  4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)
  5. Two-thirds of the unearned rent revenue has been earned.
  6. Salaries of $750 are accrued and unpaid at May 31.

Instructionsa. Journalize the adjusting entries on May 31.

b. Prepare a ledger using the three-column form of account. Enter the trialbalance amounts and post the adjusting entries. (Use J1 as the postingreference.)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 balance sheet at May 31.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Financial and Managerial Accounting

ISBN: 978-1119392132

3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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