Question

1. Journalize the adjusting entries on May 31

2. Prepare a ledger using the three-column form of account. Enter the trial balance amounts into the balance column and then post the adjusting entries. (Post entries in the order of journal entries posted in the previous part of the question. Round answers to 0 decimal places, e.g. 5,275.)

3. Prepare an adjusted trial balance on May 31. (Round answers to 0 decimal places, e.g. 5,275.)

4.  Prepare an income statement for the month of May 31. (Round answers to 0 decimal places, e.g. 5,275.)

5. Prepare an retained earnings statement for the month of May 31. (Round answers to 0 decimal places, e.g. 5,275.)

6.Prepare a balance sheet at May 31. (List Assets in order of liquidity. List Property, plant and equipment in order of land, buildings and equipment. Round answers to 0 decimal places, e.g. 5,275.)

The Swifty Corporation opened for business on May 1, 2019. Its trial balance before adjustment on May 31 is as follows. Swifty Corporation Trial Balance May 31, 2019 Account Number Credit 101 Cash Supplies Debit $3,400 2,100 3,000 13,000 Prepaid Insurance Land Buildings 61,300 15,100 Equipment Accounts Payable $11,200 Unearned Rent Revenue 3.300 Mortgage Payable 40,000 Common Stock 35,300 Rent Revenue 12,900 Advertising Expense 650 Salaries and Wages Expense 3.200 Utilities Expense 950 $102,700 $102,700 In addition to those accounts listed on the trial balance, the chart of accounts for Swifty Corporation 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, 2019. 2. A count of supplies shows $700 of unused supplies on May 31. 3. Annual depreciation is $3,060 on the buildings and $1.512 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 $800 are accrued and unpaid at May 31.

Answer 1

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Salaries and Wages expense Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 3,200.00 4,000.00 800.00 Utilities expense Debit Ref. Credit Date Explanation May 31 Balance Balance 950.00 Insurance expense Ref. Debit 250.00 Date Explanation - May 31 Adjusting Credit Balance 250.00 Supplies Expense Ref. Debit 1,400.00 Date Explanation May 31 Adjusting Credit Balance 1,400.00 Depreciation expense Ref. Debit 4,572.00 Date Explanation - May 31 Adjusting Credit Balance 4,572.00 Ref. Interest Expense Debit 400.00 Date Explanation - May 31 Adjusting Credit Balance 400.00

Credit $ 3,060.00 Adjusted Trial Balance Account Titles Debit $ Cash 3,400.00 Supplies 700.00 Prepaid Insurance 2,750.00 Land 13,000.00 Buildings 61,300.00 Accumulated Depreciation- Buildings Equipment 15,100.00 Accumulated Depreciation- Equipment Accounts Payable Salaries and Wages payable Unearned Rent Revenue Mortgage Payable Interest payable Common Stock Rent Revenue Advertising Expense 650.00 Salaries and Wages expense 4,000.00 Utilities expense 950.00 Insurance expense 250.00 Supplies Expense 1,400.00 Depreciation expense 4,572.00 Interest Expense 400.00 Total 108,472.00 1,512.00 11,200.00 800.00 1,100.00 40,000.00 400.00 35,300.00 15,100.00 108,472.00

Amount $ 15,100.00 Income Statement Rent Revenue Less: Advertising Expense Salaries and Wages expense Utilities expense Insurance expense Supplies Expense Depreciation expense Interest Expense Net Income 650.00 4,000.00 950.00 250.00 1,400.00 4,572.00 400.00 2,878.00 Amount $ Statement of Retained Earnings Retained Earnings- Opening Baland Add: Net Income Retained Earnings- Closing Baland 2,878.00 2,878.00

Amount $ 3,400.00 700.00 2,750.00 6,850.00 Balance Sheet Assets Current Assets Cash Supplies Prepaid Insurance Total Current Assets Fixed Assets Land Buildings Accumulated Depreciation- Buildings Equipment Accumulated Depreciation Equipment Total Fixed Assets Total Assets 13,000.00 61,300.00 (3,060.00) 15,100.00 (1,512.00) 84,828.00 91,678.00 Liabilities & Stockholders' Equity Liabilities Amount $ Current Liabilities Unearned Rent Revenue 1,100.00 Accounts Payable 11,200.00 Interest Payable 400.00 Salaries and Wages payable 800.00 Total Current Liabilities 13,500.00 Long Term Liabilities Mortgage Payable 40,000.00 Total Long Term Liabilities 40,000.00 Total Liabilities 53,500.00 Common Stock 35,300.00 Retained Earnings 2,878.00 Stockholder's Equity 38,178.00 Total Liabilities & Stockholder's Equity | 91,678.00

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

Event	Workings for adjustment entries	Amount $
1	Prepaid Insurance	3,000.00
	Paid for (months)	12.00
	Insurance expense	250.00
2	Supplies Balance	2,100.00
	Less: Unused Supplies	700.00
	Supplies expense	1,400.00
3	Deprecation Expense- Building	3,060.00
	Deprecation Expense- Equipment	1,512.00
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	800.00

Adjusting Entries
Event	Account	Debit $	Credit $
1	Insurance expense	250.00
	Prepaid Insurance		250.00
	(being Prepaid Insurance expired)
2	Supplies Expense	1,400.00
	Supplies		1,400.00
	(being supplies used)
3	Depreciation expense	4,572.00
	Accumulated Depreciation- Buildings		3,060.00
	Accumulated Depreciation- Equipment		1,512.00
	(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	800.00
	Salaries and Wages payable		800.00
	(being liability for Salaries expense created)

Ledger
Cash
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				3,400.00
Supplies
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				2,100.00
May 31	Adjusting			1,400.00	700.00
Prepaid Insurance
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				3,000.00
May 31	Adjusting			250.00	2,750.00
Land
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				13,000.00
Buildings
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				61,300.00
Accumulated Depreciation- Buildings
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			3,060.00	3,060.00
Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				15,100.00
Accumulated Depreciation- Equipment
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			1,512.00	1,512.00
Accounts Payable
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Balance				11,200.00
Salaries and Wages payable
Date	Explanation	Ref.	Debit	Credit	Balance
May 31	Adjusting			800.00	800.00 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 Common Stock Ref. Debit Credit Date Explanation May 31 Balance Balance 35,300.00 Rent Revenue Debit Ref. Credit Date Explanation May 31 Balance May 31 Adjusting Balance 12,900.00 15,100.00 2,200.00 Advertising Expense Debit Ref. Credit Date Explanation May 31 Balance Balance 650.00