Question

CALCULATOR STANDARD VIEW PRINTER VERSION « BACK NEXT Problem 3-02A a-d Cullumber's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. CULLUMBER'S HOTEL Trial Balance May 31, 2020 Account Number Credit 101 126 Debit $3,400 2,050 1,800 13,000 58,800 15,600 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Uneamed Rent Revenue Mortgage Payable Owner's Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $ 4,900 3,000 40,000 41,000 10,500 600 3,200 950 $99,400 $99,400 In addition to those accounts listed on the trial balance, the chart of accounts for Cullumber'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 $700 of unused supplies on May 31. 3. Annual depreciation is $3,528 on the buildings and $1,560 on equipment. 4. The mortgage at an annual 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 $800 are accrued and unpaid at May 31. Your answer is partially correct. Try again. Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually.) Credit No. Date Account Titles and Explanation 1. May 31 Insurance Expense Prepaid Insurance 2. May 31 Supplies Expense

Answer 1

Ans.

1.2.

Date	Accounts Title and Explanation	Debit	Credit
31-May	Supplies Expense	$          1,350.00
	Supplies		$     1,350.00
	[$2,050 - $700]

2.

Prepaid Insurance
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Balance				$ 1,800.00
31-May	Adjusting			$ 150.00	$ 1,650.00

Accumulated Depreciation - Building
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Adjusting			$ 294.00	$     294.00

Equipment
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Balance				$ 15,600.00

Accumulated Depreciation - Equipment
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Adjusting			$        130.00	$        130.00

Owner's Capital
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Balance				$ 41,000.00

Supplies Expense
Date	Expalnation	Ref	Debit	Credit	Balance
31-May	Adjusting		$     1,350.00		$    1,350.00

3.

Trial Balance, May 31,2020

	Debit	Credit
Cash	$3,400
Supplies	700
Prepaid Insurance	1,650
Land	13,000
Buildings	58,800
Accumulated Depreciation - Building		294
Equipment	15,600
Accumulated Depreciation -Equipment		130
Accounts Payable		4900
Unearned Rent Revenue		1,000
Salaries and Wages Payable		800
Interest Payable		200
Mortgage Payable		40,000
Owner's Capital		41,000
Rent Revenue		12,500
Advertising Expense	600
Depreciation Expense	424
Supplies Expense	1350
Interest Expense	200
Insurance Expense	150
Salaries and Wages Expense	4000
Utilities Expense	950
	$100,824	$100,824

4.

Income Statement For the month ended May 31,2020
Revenues
Rent Revenue		$                12,500.00
Expenses
Salaries and Wages Expense	$     4,000.00
Supplies Expense	$     1,350.00
Utilities Expense	$        950.00
Advertising Expense	$        600.00
Interest Expense	$        200.00
Depreciation Expense	$        424.00
Insurance Expense	$        150.00
Total Expenses		$                  7,674.00
Net Income/ Loss		$                  4,826.00

5.

Owner's Equity Statement For the month ended May 31,2020
Owner's Capital , May 1	$ 41,000.00
Add
Investment
Net Income /Loss	$     4,826.00
Owner's Capital , May 31	$ 45,826.00

6.

Balance Sheet May 31,2020
Assets
Cash		$                  3,400.00
Supplies		$                      700.00
Prepaid Insurance		$                  1,650.00
Land		$                13,000.00
Building	$ 58,800.00
Less : Accumulated Depreciation - Building	$        294.00	$                58,506.00
Equipment	$ 15,600.00
Less: Accumulated Depreciation -Equipment	$        130.00	$                15,470.00
Total Assets		$                92,726.00
Liabilities and Owner's Equity
Liabilities
Accounts Payable		$                  4,900.00
Unearned Rent Revenue		$                  1,000.00
Salaries and Wages Payable		$                      800.00
Interest Payable		$                      200.00
Mortgage Payable		$                40,000.00
Total Liabilities		$                46,900.00
Owner's Equity
Owner's Capital		$                45,826.00
Total Liabilities and Owner's Equity		$                92,726.00