Reference no: EM133101872
Question - The Cullumber Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.
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CULLUMBER HOTEL Trial Balance May 31, 2022
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Debit
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Credit
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Cash
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$2,263
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Supplies
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2,600
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Prepaid Insurance
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1,800
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Land
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14,763
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Buildings
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70,000
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Equipment
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16,800
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Accounts Payable
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$4,463
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Unearned Rent Revenue
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3,300
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Mortgage Payable
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36,000
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Common Stock
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59,763
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Rent Revenue
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9,000
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Salaries and Wages Expense
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3,000
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Utilities Expense
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800
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Advertising Expense
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500
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$112,526
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$112,526
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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.