Question

The Solo Hotel opened for business on May 1, 2014. Here is itstrial balance before adjustment on May 31.

(Prepare a ledger using T-accounts. Enter the trial balanceamounts and post the adjusting entries)

SOLO HOTEL

Trial Balance

May 31, 2014

 

 

Debit

 

Credit

Cash

 

$ 2,971

 

 

Supplies

 

2,600

 

 

Prepaid Insurance

 

1,800

 

 

Land

 

15,471

 

 

Buildings

 

76,000

 

 

Equipment

 

16,800

 

 

Accounts Payable

 

 

 

$ 5,171

Unearned Rent Revenue

 

 

 

3,300

Mortgage Payable

 

 

 

42,000

Common Stock

 

 

 

60,471

Rent Revenue

 

 

 

9,000

Salaries and Wages Expense

 

3,000

 

 

Utilities Expense

 

800

 

 

Advertising Expense

 

500

 

 

 

 

$119,942

 

$119,942

         

 

Other data:

1.

 

Insurance expires at the rate of $300 per month.

2.

 

A count of supplies shows $1,127 of unused supplies on May31.

3.

 

(a) Annual depreciation is $4,080 on the building.

 

 

(b) Annual depreciation is $3,960 on equipment.

4.

 

The mortgage interest rate is 5%. (The mortgage was taken outon May 1.)

5.

 

Unearned rent of $2,653 has been earned.

6.

 

Salaries of $690 are accrued and unpaid at May 31.