Question

Problem 3-2A The Sky ne Motel opened for business on May 1, 2015, ts tria balance before adjustment on May 31 is as folows 1, 2015 3,592 Prepaid Insurance 2,784 Buldings Martgage Payabie Common Szock 35,138 11,134 Advert sing Expense Salaries and Wages Expense in acdcon to those accouves isted on the brial ba ance, the chart of accounts for Skyine Motel a so concains the folowing accounts and account numbers: No. 142 Accumulated Dep eciation-Buildings, No. 150 Accumuated Depreciation 6Quin ent, No. 212 Saares and wages Pay abie, No. 230 Inte est Payabe, № 619 Depreciation Expense, No. 631 Supples Expense, No. 718 Interest Expense, and No. 722 Lnsuwce Expense. Other data . Prepa id insurance is a 1-year policy searting May 1, 2015. 2. A count of supplies shows $770 of unuted suppies on May 31. 3. Annual depreciazion is $3,000 on the buildings and $1,524 on equipment 4. The mortgage interest rate is 12%, me mortgage was taken out on May 1. 5, Two-thirds of the unearned rent revenue has been eaned. 6. Salaries of $771 are acerued and unpad at May 32 Prepare a ledger using the three-column form of account. Enber the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries posted in the previous part of the question.) May 3 Credit May 31 Belance Mry 3 Adjusting Prepaid Insurance 12 May 3 Blanc Adjusing May 32 May 32 May 31 May 31 djusting May 31 Balance May 3 Adjusbing Accounts Payable No. 201 May 3 Unearned Rent Revenue May 31 Blan May 3 Adusting Salaries and Wages Payable No. 212 Date Explanatlon Debit Credit Balance May 31 Interest Payable Adjusting 01 No. 230 Date Explanation Ret Debi Credit Balance May 31 Mortgage Payable Adjusting JI No. 275 Debit DateExplanation Credit Balance Ref Balance May 31 Common Stock No. 301 Date Explanation Debit Ref Credit Balance May 31 Balance Rent Revenue No. 429 Date Explanatlon Debit Credit Balance May 31 May 31 Advertising Expense Balance Adjusting J1 No. 610 Date Explanation Balance Ref Debit Credit May 31 Balance Depreclation Expense No. 619 Date Explanation Credit Balance May 31 Supplies Expense Adjusting No. 631 Date Explanation Credit Balance May 31 Interest Expense Adjusting No. 718 Date Explanatlon Ref Debit Credit Balance Adjusting May 31 No. 722 Insurance Expense DateExplanation Ref Debit Balance May 31 Salarles and Wages Expense Adjusting J1 No. 726 Date Explanatlon Credit Balance Debit May 31 Balance Adjusting 01 May 31 Utilities Expense No. 732 DateExplanation Ref Deblt Credit Balance May 31 Balance Prepare an income statement for the month of May 31. SKYLINE MOTEL Income Statement For the Month Ended May 31, 2015

Answer 1

Skyline Motel Adiustment Enteries Date 31.5.2015 Insurance Expense a/c Debit in $ Credit in $ Particulars Dr. 232 To Prepaid Insurance 232 (Insurance Expensed) 2784/12 23 31.5.2015 Supplies Expense a/c Dr 1311 To Supplies 1311 (Supplies Expensed) 2081 - 770 1311 31.5.2015 Depreciation Expense - Equip a/c Dr 1524 To Accum. -Depre - Equ 1524 To record Depreciation) Depreciation Expense Build a/c Dr.3000 To record Depreciation To Accum. -Depre - Build 3000 31.5.2015 Interest Expense a/c Dr 400 To Interest Payable 400 Interest expense accrued)40000 x 1296 x 1/12-400 31.5.2015 Unearned Rent Revenue a/c Dr 2080 To Rent Revenue 2080 (Rent Revenue recognized) 31.5.2015 Salaries and Wages Expense a/c Dr To Salaries and Wages Payable (Salary expense accrued)

Adjusted Trial Balance For the Month ending 31.5.2015 Particulars Cash Supplies Prepaid Insurance Land Buildings Accum. -Depre Build Equipment Accum. -Depre Equp Accounts Payable Unearned Rent Revenue Interest Payable Salaries and Wages Payable Mortgage Payable Common Stock Rent Revenue Advertising Expense Salaries and Wages Expense Depreciation Expense Equip Depreciation Expense Build Utilities Expense Insurance Expense Supplies Expense Interest Expense Totals Statement of Income For the Month ending 31.5.2015 Rent Revenue Less: Advertising Expense Salaries and Wages Expense Depreciation Expense Equip Depreciation Expense Build Utilities Expense Insurance Expense Supplies Expense Interest Expense Net Income Debit in $ Credit in $ 13214 3592 770 2552 12220 60000 551 4045 1524 3000 911 232 1311 400 3000 15240 1524 11261 1040 400 11974 1240 Statement of Retained Earnings For the Month ending 31.5.2015 Net Income 35138 1240 13214 551 4045 1524 3000 911 232 1311 400 106348 106348

Balance sheet As at 31.12.2015 Assets Current Assets Cash Supplies Prepaid Insurance Amounts in$ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities Accounts Payable Unearned Rent Revenue 11261 1040 400 3592 770 2552 6914 Interest Payable Salaries and Wages Payable 13472 Non Current Liabilities Non Current Assets Land Buildings Accum. -Depre Build Equipment Accum. -Depre Equp Total Assets 12220 Mortgage Payable 57000 Shareholders Equity 13716 RetadEings 40000 60000 3000 15240 1524 35138 Common Stock 1240 36378 89850 Total Liabilities & Equity 89850