The Skyline Motel opened for business on May 1, 2017. Its trial balance before adjustment on May
Question:
The Skyline Motel opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows.
SKYLINE MOTEL | ||||||
Account Number | Debit | Credit | ||||
101 | Cash | $ 3,600 | ||||
126 | Supplies | 2,050 | ||||
130 | Prepaid Insurance | 3,000 | ||||
140 | Land | 12,000 | ||||
141 | Buildings | 62,400 | ||||
149 | Equipment | 15,400 | ||||
201 | Accounts Payable | $ 11,700 | ||||
208 | Unearned Rent Revenue | 3,000 | ||||
275 | Mortgage Payable | 40,000 | ||||
311 | Common Stock | 36,000 | ||||
429 | Rent Revenue | 12,500 | ||||
610 | Advertising Expense | 600 | ||||
726 | Salaries and Wages Expense | 3,300 | ||||
732 | Utilities Expense | 850 | ||||
$103,200 | $103,200 |
In addition to those accounts listed on the trial balance, the chart of accounts for Skyline Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
1). Prepaid insurance is a 1-year policy starting May 1, 2017.
2). A count of supplies shows $800 of unused supplies on May 31.
3). Annual depreciation is $3,120 on the buildings and $1,536 on equipment.
4). The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)
5). Two-thirds of the unearned rent revenue has been earned.
6). Salaries of $800 are accrued and unpaid at May 31.
Financial Accounting
ISBN: 978-1118334324
9th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso