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Problem 4-3A

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		$ 2,936
Supplies		2,600
Prepaid Insurance		1,800
Land		15,436
Buildings		73,600
Equipment		16,800
Accounts Payable				$ 5,136
Unearned Rent Revenue				3,300
Mortgage Payable				39,600
Common Stock				60,436
Rent Revenue				9,000
Salaries and Wages Expense		3,000
Utilities Expense		800
Advertising Expense		500
		$117,472		$117,472

Other data:

1.		Insurance expires at the rate of $450 per month.
2.		A count of supplies shows $1,062 of unused supplies on May 31.
3.		(a) Annual depreciation is $4,200 on the building.
		(b) Annual depreciation is $4,080 on equipment.
4.		The mortgage interest rate is 5%. (The mortgage was taken out on May 1.)
5.		Unearned rent of $2,575 has been earned.
6.		Salaries of $767 are accrued and unpaid at May 31.

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Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.

2.

3 (a).

3 (b).

4.

5.

6.

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Show List of Accounts
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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.)

Cash

Prepaid Insurance


Supplies


Land

Building

Accumulated Depreciation-Building


Equipment

Accumulated Depreciation-Equipment


Accounts Payable

Unearned Rent Revenue


Salaries and Wages Payable


Interest Payable


Mortgage Payable

Common Stock

Rent Revenue



Salaries and Wages Expense



Utilities Expense

Advertising Expense

Interest Expense


Insurance Expense


Supplies Expense


Depreciation Expense

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Prepare an adjusted trial balance on May 31.

SOLO HOTEL Adjusted Trial Balance May 31, 2014
	Debit	Credit
	$	$





















	$	$

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Prepare an income statement for the month of May.

SOLO HOTEL Income Statement For the Month Ended May 31, 2014

		$

	$







		$

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Prepare a retained earnings statement for the month of May.

SOLO HOTEL Retained Earnings Statement For the Month Ended May 31, 2014
	$
:
	$

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Prepare a classified balance sheet at May 31. (List current assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment .)

SOLO HOTEL Balance Sheet May 31, 2014
Assets

			$


					$


	$
:

:
					$
Liabilities and Stockholders' Equity

			$



					$







					$

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