Question

solve the 4 steps

P3-2A Mac's Motel opened for business on May 1, 2017. Its trial balance before adjust ment on May 31 is as follows MAC'S MOTEL Trial Ralance May 31, 2017 Account Number Credit Debit $ 1500 2080 2.400 12.000 60,000 15,000 208 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 3100 40.000 41.380 10.100 275 301 429 610 726 732 600 $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 number No. 142 Accumulated Depreciation Buildings, No. 150 Accumulated Depreciation Equipment, No. 212 Sala ries 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 129. 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 Jl as the posting reference.) (c) Prepare an adjusted trial balance on May 31. (d) Prepare an income statement and an owner'equity statement for the month of May and a balance sheet at May 31.

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Due to character limit I am attaching the image for some parts.

Mac's Motel

First we will calculate adjustment amount. Then we will make adjustment entries.

Event	Workings for adjustment entries	Amount $
1	Prepaid Insurance	2,400.00
	Paid for (months)	12.00
	Insurance expense	200.00
2	Supplies Balance	2,080.00
	Less: Unused Supplies	750.00
	Supplies expense	1,330.00
3	Deprecation Expense- Building	3,000.00
	Deprecation Expense- Equipment	1,500.00
4	Mortgage Payable	40,000.00
	Interest rate	12%
	Annual Interest	4,800.00
	Interest Expense	400.00
5	Unearned Rent revenue	3,300.00
	Rent earned (2/3)	2,200.00
6	Salary and Wages Payable	750.00

Adjusting Entries
Event	Account	Debit $	Credit $
1	Insurance expense	200.00
	Prepaid Insurance		200.00
	(being Prepaid Insurance expired)
2	Supplies Expense	1,330.00
	Supplies		1,330.00
	(being supplies used)
3	Depreciation expense	4,500.00
	Accumulated Depreciation- Buildings		3,000.00
	Accumulated Depreciation- Equipment		1,500.00
	(being Depreciation charged to Buildings and Equipment)
4	Interest Expense	400.00
	Interest payable		400.00
	(being liability for Interest Expense created)
5	Unearned Rent Revenue	2,200.00
	Rent Revenue		2,200.00
	(being Unearned Rent Revenue earned )
6	Salaries and Wages expense	750.00
	Salaries and Wages payable		750.00
	(being liability for Salaries expense created)

Ledger
Cash
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				3,500.00
Supplies
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				2,080.00
May 31	Adjusting			1,330.00	750.00
Prepaid Insurance
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				2,400.00
May 31	Adjusting			200.00	2,200.00
Land
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				12,000.00
Buildings
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				60,000.00
Accumulated Depreciation- Buildings
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			3,000.00	3,000.00
Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				15,000.00
Accumulated Depreciation- Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			1,500.00	1,500.00
Accounts Payable
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				4,800.00
Salaries and Wages payable
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			750.00	750.00 Unearned Rent Revenue Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 3,300.00 1,100.00 2,200.00 Mortgage Payable Ref. Debit Credit Date Explanation May 31 Balance Balance 40,000.00 Interest payable Ref. Debit Date Explanation May 31 Adjusting Credit 400.00 Balance 400.00 Owner's Capital Ref. Debit Credit Date Explanation May 31 Balance Balance 41,380.00 Rent Revenue Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 10,300.00 12,500.00 2,200.00 Advertising Expense Debit Ref. Credit Date Explanation May 31 Balance Balance 600.00 Salaries and Wages expense Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 3,300.00 4,050.00 750.00 Utilities expense Debit Ref. Credit 1 Date Explanation 2 May 31 Balance Balance 900.00 Insurance expense Ref. Debit 200.00 5 Date Explanation 6 May 31 Adjusting Credit Balance 200.00 8 Ref. Supplies Expense Debit 1,330.00 9 Date Explanation 0 May 31 Adjusting Credit Balance 1,330.00 Depreciation expense Debit 4,500.00 Ref. 3 Date Explanation 4 May 31 Adjusting Credit Balance 4,500.00 Ref. Interest Expense Debit 400.00 7 Date Explanation 8 May 31 Adjusting Credit Balance 400.00 9 Credit $ 3,000.00 Adjusted Trial Balance Account Titles Debit $ Cash 3,500.00 Supplies 750.00 Prepaid Insurance 2,200.00 Land 12,000.00 Buildings 60,000.00 Accumulated Depreciation- Buildings Equipment 1 15,000.00 Accumulated Depreciation- Equipment Accounts Payable Salaries and Wages payable Unearned Rent Revenue Mortgage Payable Interest payable Owner's Capital Rent Revenue Advertising Expense 600.00 Salaries and Wages expense 4,050.00 Utilities expense 900.00 Insurance expense 200.00 Supplies Expense 1,330.00 Depreciation expense 4,500.00 Interest Expense 400.00 Total 105,430.00 1,500.00 4,800.00 750.00 1,100.00 40,000.00 400.00 41,380.00 12,500.00 105,430.00 | Amount $ 12,500.00 Income Statement Rent Revenue Less: Advertising Expense Salaries and Wages expense Utilities expense Insurance expense Supplies Expense Depreciation expense Interest Expense Net Income 600.00 4,050.00 900.00 200.00 1,330.00 4,500.00 400.00 520.00 Statement of Owner's Capital Owner's Capital- Opening Balance Add: Net Income Owner's Capital- Closing Balance Amount $ 41,380.00 520.00 41,900.00 Amount $ Balance Sheet Assets Current Assets Cash Supplies Prepaid Insurance Total Current Assets Fixed Assets 3,500.00 750.00 2,200.00 6,450.00 Land Buildings Accumulated Depreciation- Buildings Equipment Accumulated Depreciation- Equipment Total Fixed Assets Total Assets 12,000.00 60.000.00 (3,000.00) 15,000.00 (1,500.00) 82,500.00 88,950.00 Amount $ Liabilities & Stockholders' Equity Liabilities Current Liabilities Unearned Rent Revenue Accounts Payable Interest Payable Salaries and Wages payable Total Current Liabilities Long Term Liabilities Mortgage Payable Total Long Term Liabilities Total Liabilities Owner's Capital Owner's Capital Total Liabilities & Owner's Capital 1,100.00 4,800.00 400.00 750.00 7,050.00 40,000.00 40,000.00 47,050.00 41,900.00 41,900.00 88,950.00