Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following is the unadjusted trial balance for Crane Lodge Ltd. at its year end, May 31, 2021. The company adjusts its accounts monthly.
The following is the unadjusted trial balance for Crane Lodge Ltd. at its year end, May 31, 2021. The company adjusts its accounts monthly. Debit Credit Cash $7,019 Accounts receivable 11,400 Supplies 5,090 Prepaid insurance 4,700 Land 104,060 Buildings 172,800 Accumulated depreciation-building $ 22,500 Furniture 36,300 Accumulated depreciation-furniture 18,500 Accounts payable Deferred revenue 8,720 17,500 Mortgage payable, due 2024 114,000 Common shares 70,000 Retained earnings 43,500 Dividends declared 1,930 Rent income 205,879 Salaries expense 95,700 Utilities expense 25,280 Depreciation expense 13,170 Depreciation expense 13,170 Interest expense 8,850 Insurance expense 6,580 Advertising expense 910 Income tax expense 6,810 $500,599 $500,599 Additional information: 1. An annual insurance policy was purchased for the first time on October 1, 2020, for $11,280 cash. 2. A count of supplies shows $1,443 of supplies on hand on May 31. 3. The buildings have an estimated useful life of 20 years and straight-line depreciation is applied. 4. The furniture has an estimated useful life of five years and straight-line depreciation is applied. 5. 6. 7. Customers must pay a $100 deposit if they want to book a room in advance during the peak period. An analysis of these bookings indicates that 175 deposits were received and credited to Deferred Revenue. By May 31, 25 of the deposits we earned. On May 25, a local business contracted with Crane Lodge to rent one of its housekeeping units for four months, starting June 1, at a rate of $2,733 per month. An advance payment equal to one month's rent was paid on May 25 and credited to Rent Income. On May 31, Crane Lodge has earned $1,772 of rent income from customers who are currently staying at the lodge. The customers will pay the amount owing only when they check out in early June. 8. Salaries of $1,693 are unpaid at May 31. 9. Interest on the mortgage payable is $665 for the month of May and due June 1. 10. The May utility bill of $2,114 has not yet been recorded or paid. 11. Additional income tax is estimated to be $970. (a) Prepare adjusting journal entries for the month. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all amounts to the nearest dollar. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No Date Account Titles and Explanation Debit Credit 1. May 31 2. 31 3. 31 4. 31 5. 31 6. 31 9. 10 10. 7. 31 8. 31 11. 14 31 31 31
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started