P4-3A The Vang Hotel opened for business on May 1, 2012. Here is its trial balance before adjustment on May 31.

The Vang Hotel opened for business on May 1, 2012. Here is its trial balance before adjustment on May 31.

                              VANG HOTEL

                               Trial Balance

                               May 31, 2012

                              Debit          Credit

Cash                     $ 2,500

Prepaid Insurance    1,800

Supplies                 2,600

Land                      15,000

Buildings               70,000

Equipment             16,800

Accounts Payable                   $ 4,700

Unearned Rent Revenue             3,300

Mortgage Payable                    36,000

Common Stock                       60,000

Rent Revenue                           9,000

Salaries and Wages Expense 3,000

Utilities Expense           800

Advertising Expense       500

                             $113,000    $113,000

Other data:

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

2. A count of supplies shows $1,050 of unused supplies on May 31.

3. Annual depreciation is $3,600 on the building and $3,000 on equipment.

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

5. Unearned rent of $2,500 has been earned.

6. Salaries of $900 are accrued and unpaid at May 31.

Instructions

(a)  Journalize the adjusting entries on May 31.

(b)  Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.

(c)  Prepare an adjusted trial balance on May 31.

(d)  Prepare an income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31.

(e)  Identify which accounts should be closed on May 31.