Reference no: EM133101872

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

CULLUMBER HOTEL Trial Balance May 31, 2022
	Debit	Credit
Cash	$2,263
Supplies	2,600
Prepaid Insurance	1,800
Land	14,763
Buildings	70,000
Equipment	16,800
Accounts Payable		$4,463
Unearned Rent Revenue		3,300
Mortgage Payable		36,000
Common Stock		59,763
Rent Revenue		9,000
Salaries and Wages Expense	3,000
Utilities Expense	800
Advertising Expense	500
	$112,526	$112,526

Other data:

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

2. A count of supplies shows $1,120 of unused supplies on May 31.

3. (a) Annual depreciation is $2,880 on the building.

(b) Annual depreciation is $2,280 on equipment.

4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.)

5. Unearned rent of $2,680 has been earned.

6. Salaries of $650 are accrued and unpaid at May 31.

Required -

1. Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries presented in the previous question.)

2. Prepare an adjusted trial balance on May 31.

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