... May
31 is as follows.
MAC’S MOTEL
Trial Balance
May 31, 2017
Account No. Debit Credit
101
126
130
140
141
149
201
208
275
301
429
610
726
732
Cash
Supplies
Prepaid Insurance
Land
Buildings
Equipment
Accounts Payable
Unearned Service Revenue
Mortgage Payable
Owner’s Capital
Rent Revenue
Advertising Expense
Salaries and Wages Expense
Utilities Expense
3,500
2,080
2,400
12,000
60,000
15,000
600
3,300
900
4,800
3,300
40,000
41,380
10,300
$99,780 $99,780
In addition to those accounts listed on the trial balance, the chart of accounts for Mac’s Motel
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, 2017.
2. A count of supplies shows $750 of unused supplies on May 31.
3. Annual depreciation is $3,000 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 has been earned.
6. Salaries of $750 are accrued and unpaid at May 31.
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).
c) Prepare an adjusted trial balance on May 31.
d) Prepare an income statement and an owner’s equity statement for the month of May
and a balance sheet at May 31