Preparing and posting adjusting journal entries; preparing an adjusted trial balance and f...

Preparing and posting adjusting journal entries; preparing an adjusted trial balance and financial statements [45-60 min]

The trial balance of Lexington Inn Corporation at December 31, 2012, and the data needed for the month-end adjustments follow.

Adjustment data at December 31 follow:

a. Prepaid insurance still in force, $700.

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b. Supplies used during the month, $500.

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c. Depreciation for the month, $1,600.

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d. Accrued salary expense, $400.

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e. Unearned service revenue still unearned, $1,400.

Requirements

1. Journalize the adjusting entries.

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2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to the ledger accounts.

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3. Prepare the adjusted trial balance.

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4. Prepare the income statement, statement of retained earnings, and balance sheet for the business for the month ended December 31, 2012.