Reference no: EM132451307

Problem - The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31.

SOLO HOTEL Trial Balance May 31, 2014
	Debit	Credit
Cash	$ 2,546
Supplies	2,600
Prepaid Insurance	1,800
Land	15,046
Buildings	74,800
Equipment	16,800
Accounts Payable		$ 4,746
Unearned Rent Revenue		3,300
Mortgage Payable		40,800
Common Stock		60,046
Rent Revenue		9,000
Salaries and Wages Expense	3,000
Utilities Expense	800
Advertising Expense	500
	$117,892	$117,892

Other data -

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

2. A count of supplies shows $1,178 of unused supplies on May 31.

3. (a) Annual depreciation is $3,600 on the building.

(b) Annual depreciation is $3,480 on equipment.

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

5. Unearned rent of $2,523 has been earned.

6. Salaries of $800 are accrued and unpaid at May 31.

Required -

1. Journalize the adjusting entries on May 31.

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

3. Prepare an adjusted trial balance on May 31.

4. Prepare an income statement for the month of May.

5. Prepare a retained earnings statement for the month of May.

6. Prepare a classified balance sheet at May 31.