The Moto Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. 

Other data: 

1. Insurance expires at the rate of $450 per month. 

2. A count of supplies shows $1,050 of unused supplies on May 31. 

3. Annual depreciation is $3,600 on the building and $3,000 on equipment. 

4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 

5. Unearned rent of $2,500 has been earned. 6. Salaries of $900 are accrued and unpaid at May 31. 

Instructions 

a. Journalize the adjusting entries on May 31. 

b. Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. 

c. Prepare an adjusted trial balance on May 31. 

d. Prepare (1) an income statement and (2) a retained earnings statement for the month of May and (3) a classifi ed balance sheet at May 31. 

e. Identify which accounts should be closed on May 31.

Transcribed Image Text:

Moto Hotel Trial Balance May 31, 2022 Debit $ 2,500 Credit Cash Supplies Prepaid Insurance 2,600 1,800 Land 15,000 Buildings Equipment Accounts Payable 70,000 16,800 $ 4,700 Debit Credit $ 3,300 Unearned Rent Revenue Mortgage Payable Common Stock 36,000 60,000 Rent Revenue 9,000 $ 3,000 Salaries and Wages Expense Utilities Expense Advertising Expense 800 500 $113,000 $113,000