Question

e Accounts 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. 5

Answer 1

Credit Requirement (a) Date Accounts Title and Explaination 31-May Insurance Expense Prepaid insurance (To Record Expired Insurance) Debit $ 200 $ 200 31-May Supplies expenses Supplies (To Record supplies consumed) $1,330 $1,330 $ 250 31-May Depreciation expense Accumulated Depreciation-Building (To Record Depreciation Expense) $ 250 $ 125 31-May Depreciation expense Accumulated Depreciation-Equipment (To Record Depreciation Expense) $ 125 $ 400 31-May Interest Expenses Interest Payable (To Record Interest Payable) $ 400 31-May Unearned Rent Revenue Rent Revenue (To Record Earned Rent) $2,200 $2,200 $ 750 31-May Salaries and Wages Expenses Salaries and Wages Payable (To Record Accrued Salaries) $ 750

Requirement (b) Cash No. 101 Date Explanation Ref. Debit Credit Balance 31-May Balance v $ 3,500 $ $ 3,500 Supplies No. 126 Date Explanation Ref. Debit Credit Balance 31-May Balance v $ 2,080 $ $ 2,080 31-May Adjusting 31 $ $ 1,330 $ 750 Prepaid Insurance No. 130 Date Explanation Ref. Debit Credit Balance 31-May Balance lv $ 2,400 $ $ 2,400 31-May Adjusting 31 $ $ 200 $ 2,200 Land No. 140 Date Explanation Ref. Debit Credit Balance 31-May Balance V $ 12,000 $ $ 12,000 Buildings No. 141 Date Explanation Ref. Debit Credit Balance 31-May Balance v $ 60,000 $ $ 60,000 Accumulated Depreciation-Buildings No. 142 Date Explanation Ref. Debit Credit Balance 31-May Adjusting 31 $ $ 250 $ 250 Equipment No. 149 Date Explanation Ref. Debit Credit Balance 31-May Balance V $ 15,000 $ $ 15,000 Accumulated Depreciation Equipment No. 150 Date Explanation Ref. Debit Credit Balance 31-May Adjusting J1 $ $ 125 $ 125 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance 31-May Balance V $ $ 4,800 $ 4,800 Unearned Rent Revenue No. 208 Date Explanation Ref. Debit Credit Balance 31-May Balance v $ 2,200 $ 2,200 31-May Adjusting J1 $ 3,300 $ 1,100 Salaries and Wages Payable No. 212 Date Explanation Ref. Debit Credit Balance 31-May Adjusting 31 $ $ 750 $ 750 Interest Payable No. 230 Date Explanation Ref. Debit Credit Balance 31-May Adjusting J1 $ $ 400 $ 400

Mortgage Payable Date Owner's Capital Date $ Rent Revenue Date Advertising Expense Date Depreciation Expense Date No. 275 Explanation Ref. Debit Credit Balance 31-May Balance v $ $40,000 $40,000 No. 301 Explanation Ref. Debit Credit Balance 31-May Balance V $ $ 41,380 $ 41,380 No. 429 Explanation Ref. Debit Credit Balance 31-May Balance V $ $ 10,300 $ 10,300 31-May Adjusting 31 $ $ 2,200 $ 12,500 No. 610 Explanation Ref. Debit Credit Balance 31-May Balance V $ 600 $ $ 600 No. 619 Explanation Ref. Debit Credit Balance 31-May Adjusting 31 $ 375$ $ 375 No. 631 Explanation Ref. Debit Credit Balance 31-May Adjusting J1 $ 1,330 $ $ 1,330 No. 718 Explanation Ref. Debit Credit Balance 31-May Adjusting 31 $ 400 $ $ 400 No. 722 Explanation Ref. Debit Credit Balance 31-May Adjusting J1 $ 200 $ $ 200 No. 726 Explanation Ref. Debit Credit Balance 31-May Balance V $ 3,300 $ $ 3,300 31-May Adjusting 31 $ 750 $ $ 4,050 No. 732 Explanation Ref. Debit Credit Balance 31-May Balance V $ 900 $ $ 900 Supplies Expense Date Interest Expense Date Insurance Expense Date Salaries and Wages Expense Date Utilities Expense Date

Requirement (c) MAC'S MOTEL Adjusted Trial Balance Account Number Accounts Title 101 Cash 126 Supplies 130 Prepaid Insurance 140 Land 141 Buildings 142 Accumulated Depreciation- Building 149 Equipment 150 Accumulated Depreciation- Equipment 201 Accounts payable 208 Unearned Rent Revenue 212 Salaries and Wages Payable 230 Interest Payable 275 Mortgage Payable Owner's Capital 429 Rent Revenue 610 Advertising Expenses 619 Depreciation expenses 631 Supplies Expenses 718 Interest Expenses 726 Salaries and Wages Expenses 732 Utilities Expenses 722 Insurance Expenses Total Debit Credit $ 3,500 $ 750 $ 2,200 $ 12,000 $ 60,000 $ 250 $ 15,000 $ 125 $ 4,800 $ 1,100 $ 750 $ 400 $ 40,000 $ 41,380 $ 12,500 $ 600 $ 375 $ 1,330 $ 400 $ 4,050 $ 900 $ 200 $ 101,305 $ 101,305 301

$ 12,500 Requirement (d) MAC'S MOTEL Income Statement Rent Revenue Less: Operating Expenses; Advertising Expenses $ 600 Depreciation expenses $ 375 Supplies Expenses $ 1,330 Interest Expenses $ 400 Salaries and Wages Expenses $ 4,050 Utilities Expenses $ 900 Insurance Expenses $ 200 Total Operating Expenses Net income ululull $ $ 7,855 4,645 Requirement (d) MAC'S MOTEL Statement of owner's equity Owner's Capital $ Add: Net Income $ Ending Balance $ 41,380 4,645 46,025

Requirement (d) Assets Current Assets Cash Supplies Prepaid Insurance Total Current Assets MAC'S MOTEL Balance Sheet As at May 31, 2017 Liabilities Current Liabilities $ 3,500 Accounts Payable $4,800 $ 750 Unearned Rent Revenue $1,100 $ 2,200 Salaries and Wages Payable $ 750 $ 6,450 Interest Payable $ 400 $ 7,050 $ 40,000 Non Current Assets Non Current Liabilities Land $ 12,000 Mortgage Payable Equipment $ 15,000 Less : Accumulated Depreciation-Equipment $ (125) $14,875 Owners Equity Building $60,000 Owners Capital Less : Accumulated Depreciation-Building $ (250) $ 59,750 Total Non Current Assets $ 86,625 Total Assets $93,075 Total Liabilities and Equity $46,025 $ 93,075 Note : Please comment down for any further clarifications.