P3.11A (LO 2, 3, 4) AP Highland Cove Resort has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 monthly adjustments:

HIGHLAND COVE RESORT

Trial Balance

May 31, 2024

Debit Credit

Cash $ 17,520

Prepaid insurance 1,590

Supplies 995

Land 35,000

Building 150,000

Accumulated depreciationbuilding $ 47,750

Furniture 33,000

Accumulated depreciationfurniture 12,925

Accounts payable 8,500

Unearned revenue 15,000

Mortgage payable 96,000

K. MacPhail, capital 85,000

K. MacPhail, drawings 42,735

Service revenue 246,150

Depreciation expense 5,775

Insurance expense 5,830

Interest expense 5,720

Repairs expense 14,400

Salaries expense 156,710

Supplies expense 4,450

Utilities expense 37,600

$511,325 $511,325

Additional information:

1. The company pays $6,360 for its annual insurance policy on July 31 of each year.
2. Account shows $560 of supplies on hand on May 31, 2024.
3. The building has an estimated useful life of 50 years.
4. The furniture has an estimated useful life of 10 years.
5. Services related to two-thirds of the unearned revenue have been performed.
6. The mortgage interest rate is 6.5% per year. Interest has been paid to April 30, 2024.
7. Salaries accrued to the end of May were $1,450.
8. The May utility bill of $3,420 is unrecorded and unpaid.

Instructions:

1. Prepare T accounts and enter the unadjusted trial balance amounts.
2. Prepare and post the monthly adjusting entries on May 31.
3. Prepare an adjusted trial balance at May 31.
4. Prepare an income statement and a statement of owners equity for the year ended May 31, and a balance sheet as at May 31, 2024.