P3-2B Badger Motel, Ltd. opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows

Instructions

(a) Journalize the adjusting entries on May 31.

(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries.

(Use J1 as the posting reference.) BADGER MOTEL, LTD. Trial Balance May 31, 2017 Account Number Debit Credit 101 Cash 2,500 126 Supplies 1,520 130 Prepaid Insurance 2,400 140 Land 14,000 141 Buildings 58,000 157 Equipment 15,000 201 Accounts Payable 4,800 208 Unearned Rent Revenue 3,300 275 Mortgage Payable 38,000 311 Share CapitalOrdinary 40,000 429 Rent Revenue 12,300 610 Advertising Expense 780 726 Salaries and Wages Expense 3,300 732 Utilities Expense 900 98,400 98,400 Problems: Set B 153

(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 statement of fi nancial position at May 31.

(c) Adj. trial balance 99,875 (d) Net income 6,675 Ending retained earnings 6,675 Total assets 91,705

P3-2B Badger Motel, Ltd. opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows. BADGER MOTEL, LTD. Trial Balance May 31, 2017 101 126 130 Account Number Cash Supplies Prepaid Insurance Debit Credit 2,500 1,520 2,400 140 Land 14,000 141 Buildings 58,000 157 Equipment 15,000 201 208 275 Accounts Payable Unearned Rent Revenue Mortgage Payable 4,800 3,300 38,000 311 Share Capital-Ordinary 40,000 429 Rent Revenue 12,300 610 Advertising Expense 780 726 Salaries and Wages Expense 3,300 732 Utilities Expense 900 98,400 98,400 In addition to those accounts listed on the trial balance, the chart of accounts for Badger Motel, Ltd. also contains the following accounts and account numbers: No. 142 Accumu- lated Depreciation-Buildings, No. 158 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Prepaid insurance is a 1-year policy starting May 1, 2014. 2. A count of supplies shows 350 of unused supplies on May 31. 3. Annual depreciation is 2,640 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 should be recognized as rent revenue prior to May 31. 6. Salaries of 750 are accrued and unpaid at May 31.