Practice Problem 1 Oriole's Motel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. ORIOLE'S MOTEL Trial Balance May 31, 2020 Account Number Credit 101 126 130 Debit $ 3,600 2,050 3,000 15,000 60,800 15,600 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable Owner's Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $ 4,800 3,300 40,000 41,200 15,600 726 732 550 3,400 900 $104,900 $104,900 In addition to those accounts listed on the trial balance, the chart of accounts for Hank's Hotel 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 $800 of unused supplies on May 31. 3. Annual depreciation is $3,648 on the buildings and $1,560 on equipment. 4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 5. Two-thirds of the unearned rent revenue has been earned. 6. Salaries of $700 are accrued and unpaid at May 31. Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. May 31 Insurance Expense Prepaid Insurance 2. May 31 Supplies Expense Supplies 3. May 31 Depreciation Expense Accumulated Depreciation-Buildings Accumulated Depreciation Equipment 4. May 31 Interest Expense Interest Payable 5. May 31 Unearned Rent Revenue 2200 Rent Revenue 6. May 31 Salaries and Wages Expense Salaries and Wages Payable 700 Prepare a ledger using the three-column form of account. Enter the trial balance amounts into the balance No. 101 Balance Ref. Debit Credit Cash Date May 31 Supplies Date Explanation Balance No. 126 Balance Explanation Ref. Debit Credit May 31 Balance May 31 Adjusting Prepaid Insurance Date Explanation No. 130 Ref. Debit Credit May 31 Balance Adjusting May 31 Land Date Explanation Ref. Debit No. 140 Balance Credit May 31 Balance Buildings Date No. 141 Balance Explanation Ref. Debit Credit May 31 Balance No 142 Debit Credit Balance Accumulated Depreciation Buildings Date Explanation Ref. May 31 Adjusting Equipment Date Explanation Ref. Balance Accumulated Depreciation Equipment Date Explanation Ref. May 31 Adjusting No. 149 Balance Debit Credit Na 150 Debit Credit Balance Accounts Payable Date Explanation Balance No. 201 Balance Ref. Debit Credit Na 208 Uneared Rent Revenue Date Explanation Ref. Debit Credit Credit Balance Balance NO 212 Adjusting Salaries and Wages Payable Date Explanation May 31 Austin Ref. Debit Credit Balance No. 230 Interest Payable Date Explanation Ref. Debit Credit Balance May 31 Adjusting No. 275 Balance Ref. Debit Credit Mortgage Payable Date Explanation May 31 Balance Owner's Capital Date Explanation May 31 Balance No. 301 Balance Ref. Debit Credit No 429 Rent Revenue Date Explanation Ref. Debit Credit Balance May 31 Balance 11 N 610 Ref. Debit Credit Balance May 31 Adjusting Advertising Expense Date Explanation May 31 Balance Depreciation Expense Date Explanation May 31 Adjusting No. 619 Ref. Debit Credit Balance No. 631 Balance Ref. Debit Credit No. 718 Balance Ref. Debit Credit Supplies Expense Date Explanation May 31 Adjusting Interest Expense Date Explanation May 31 Adjusting Insurance Expense Date Explanation May 31 Adjusting Salaries and Wages Expense Date Explanation May 31 Balance No. 722 Balance Debit Credit Ref. 11 No. 726 Balance Ref. Debit Credit May 31 Adjusting Utilities Expense Date Explanation No. 732 Ref. Debit Credit Balance May 31 Balance Prepare an aduled trial balance on May 31. ORIOLE'S MOTEL Adjustad Trial Balance Mortgage Payable D 's Capital Advertising Expert Salaries and Wages Export A utod D ion Buildings Accumulated Depreciation Equipe Salaries and Wages Payable curaries Eye Prepare an owner's equity statement for the month of May. ORIOLE'S MOTEL Owner's Equity Statement For the Year Ended May 31, 2020 Owner's Capital, May 1 Add Investment Net Income / (Loss) Owner's Capital, May 31 Prepare an income statement for the month of May. ORIOLE'S MOTEL Income Statement For the Year Ended May 31, 2020 Revenues Rent Revenue Expenses Salaries and Wages Expense Supplies Expense Utilities Expense Advertising Expense Interest Expense Depreciation Expense Insurance Expense Total Expenses Net Income / (Loss) Prepare a balance sheet at May 31. (List Assets in order of liquidity. List Property, plant and Equipment in orde ORTOLES MOTEL Balance Sheet May 31, 2020 Assets Cash Supplies Prepaid Insurance Land Buildings Less Accumulated Depreciation-Buildings Equipment Less Accumulated Depreciation Equipment Equipment Total Assets Liabilities and Owner's Equity Liabilities Accounts Payable Unearned Rent Revenue Salaries and Wages Payable Interest Payable Mortgage Payable Total abilities Owner's Equity Owner's Capital Total Liabilities and Owner's Equity