The Moto Hotel opened for business on May 1.2017. Here is its trial balance before adjustment on May 31.

Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the building and $3,000 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $900 arc accrued and unpaid at May 31.
Instructions
(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries.
(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 classified balance sheet at May 31.
(e) Identify which accounts should be closed on May 31.

Transcribed Image Text:

MOTO HOTEL Irial Balance May 31, 2017 Debit 2,500 2,600 1,800 15,000 70,000 16,800 Prepaid Insurance Buildings Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock Rent Revenue Salaries and Wages Expense Utilities Expense Advertising Expense 4,700 3,300 36,000 60,000 9,000 3,000 9 $113,000 $113,000