Acc280 Financial Accounting: P4-3A Olathe Hotel opened for business on May 1, 2010

Acc280 Financial Accounting

P4-3A
Olathe Hotel opened for business on May 1, 2010. Here is its trial balance before adjustment on May 31.?
OLATHE HOTEL
Trial Balance
May 31, 2010
Debit Credit
Cash 2,500
Prepaid Insurance 1,800
Supplies 2,600
Land 15,000
Lodge 70,000
Furniture 16,800
Accounts Payable 4,700
Unearned Rent Revenue 3,300
Mortgage Payable 36,000
Common Stock 60,000
Rent Revenue 9,000
Salaries Expense 3,000
Utilities Expense 800
Advertising Expense 500
113,000 113,000
Other data:
1. Insurance expires at the rate of $300 per month.
2. A count of supplies shows $1,050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture.
4. The mortgage interest rate is 7%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,500 has been earned.
6. Salaries of $750 are accrued and unpaid at May 31.
Instructions:
1. Journalize entries
2. Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries.
3. Complete the Adjusted Trial Balance as of May 31.
4. Complete the income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31
5. Indicate which accounts should be closed on May 31.
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