Reference no: EM132468541
Problem - Sheridan's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows.
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SHERIDAN'S HOTEL Trial Balance May 31, 2020
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Account Number
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Debit
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Credit
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101 Cash
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$3,400
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126 Supplies
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2,150
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130 Prepaid Insurance
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2,400
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140 Land
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13,000
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141 Buildings
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59,000
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149 Equipment
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15,000
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201 Accounts Payable
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$4,800
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208 Unearned Rent Revenue
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3,300
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275 Mortgage Payable
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40,000
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301 Owner's Capital
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41,500
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429 Rent Revenue
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10,100
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610 Advertising Expense
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600
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726 Salaries and Wages Expense
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3,200
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732 Utilities Expense
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950
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Total
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$99,700
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$99,700
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In addition to those accounts listed on the trial balance, the chart of accounts for Sheridan's Hotel 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, 2020.
2. A count of supplies shows $800 of unused supplies on May 31.
3. Annual depreciation is $3,540 on the buildings and $1,500 on equipment.
4. The mortgage at an annual interest rate is 6%. (The mortgage was taken out on May 1.)
5. Two-thirds of the unearned rent revenue has been earned.
6. Salaries of $700 are accrued and unpaid at May 31.
Required -
1. How do you Journalize the adjusting entries on May 31?
2. How do you Prepare ledger using the three-column form of account. Enter the trial balance amounts into the balance column and then post the adjusting entries?
3. How do you Prepare adjusted trial balance on May 31?
4. How do you Prepare income statement for the month of May?
5. How do you Prepare owner's equity statement for the month of May?
6. How do you Prepare balance sheet at May 31?