The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31.MOTO HOTELTrial BalanceMay 31, 2017DebitCreditCash $ 2,333Supplies 2,600Prepaid Insurance 1,800Land 14,833Buildings 71,200Equipment 16,800Accounts Payable $ 4,533Unearned Rent Revenue 3,300Mortgage Payable 37,200Common Stock 59,833Rent Revenue 9,000Salaries and Wages Expense 3,000Utilities Expense 800Advertising Expense500$113,866$113,866Other data:1. Insurance expires at the rate of $450 per month.2. A count of supplies shows $1,100 of unused supplies on May 31.3. (a) Annual depreciation is $3,000 on the building.(b) Annual depreciation is $2,400 on equipment.4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)5. Unearned rent of $2,660 has been earned.6. Salaries of $740 are accrued and unpaid at May 31.

Question Completion:

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

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

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

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

The Moto Hotel

(a) Ledger using T-accounts. Enter the trial balance amounts and post the  adjusting entries:

Accounts                            Debit       Credit

Cash

Unadjusted Trial balance $ 2,333

Accounts                            Debit       Credit

Supplies

Unadjusted Trial balance $2,600

Supplies expense                            $1,500

Balance                                             $1,100

Accounts                            Debit       Credit

Prepaid Insurance

Unadjusted Trial balance $1,800

Insurance Expense                             450

Balance c/d                                     $1,350

Accounts                            Debit       Credit

Land

Unadjusted Trial balance $14,833

Accounts                            Debit       Credit

Buildings

Unadjusted Trial balance $71,200

Accounts                            Debit       Credit

Equipment

Unadjusted Trial balance $16,800

Accounts                            Debit       Credit

Accounts Payable

Unadjusted Trial balance                  $ 4,533

Accounts                            Debit       Credit

Salaries and Wages Payable

Salaries and Wages                            $740

Accounts                            Debit       Credit

Unearned Rent Revenue

Unadjusted Trial balance                   $3,300

Rent Revenue                  $2,660

Balance c/d                          $640

Accounts                            Debit       Credit

Mortgage Payable

Unadjusted Trial balance                 $37,200

Accounts                            Debit       Credit

Common Stock

Unadjusted Trial balance                $59,833

Accounts                            Debit       Credit

Rent Revenue

Unadjusted Trial balance                  $9,000

Unearned Rent Revenue                  $2,660

Balance c/d                     $11,660

Accounts                            Debit       Credit

Salaries and Wages Expense

Unadjusted Trial balance $3,000

Salaries & Wages Payable     740

Balance c/d                                      $3,740

Accounts                            Debit       Credit

Utilities Expense

Unadjusted Trial balance $800

Accounts                            Debit       Credit

Advertising Expense

Unadjusted Trial balance $500

Accounts                            Debit       Credit

Insurance Expense

Prepaid Insurance             $450

Accounts                            Debit       Credit

Supplies Expense

Supplies                          $1,500

Accounts                            Debit       Credit

Depreciation Expense - Building

Accumulated depreciation $3,000

Accounts                            Debit       Credit

Accumulated Depreciation Expense - Building

Depreciation Expense                     $3,000

Accounts                            Debit       Credit

Depreciation Expense - Equipment

Accumulated depreciation $2,400

Accounts                            Debit       Credit

Accumulated Depreciation Expense - Equipment

Depreciation Expense                     $2,400

Accounts                            Debit       Credit

Mortgage Interest Expense

Mortgage Interest Payable $186

Accounts                            Debit       Credit

Mortgage Interest Payable

Mortgage Interest Expense              $186

(b) Adjusted trial balance on May 31:

                                                 Debit          Credit

Cash                                       $ 2,333

Supplies                                      1,100

Prepaid Insurance                     1,350

Land                                         14,833

Buildings                                  71,200

Equipment                               16,800

Accounts Payable                                     $ 4,533

Salaries & Wages Payable                              740

Mortgage Interest Payable                             186

Unearned Rent Revenue                               640

Mortgage Payable                                     37,200

Common Stock                                         59,833

Rent Revenue                                            11,660

Salaries and Wages Expense   3,740

Utilities Expense                          800

Advertising Expense                   500

Insurance Expense                     450

Supplies Expense                     1,500

Depreciation Exp. - Building   3,000

Depreciation Exp-Equipment 2,400

Mortgage Expense                     186

Accumulated Depreciation- Building        3,000

Accumulated Depreciation- Equipment   2,400

Totals                                $120,192     $120,192

(c) Income statement and a retained earnings statement for the month of May  and a classified balance sheet at May 31:

Income Statement for the month ended May 31:

Rent Revenue                                            11,660

Salaries and Wages Expense   3,740

Utilities Expense                          800

Advertising Expense                   500

Insurance Expense                     450

Supplies Expense                     1,500

Depreciation Exp. - Building   3,000

Depreciation Exp-Equipment 2,400

Mortgage Expense                     186        (12,576)

Net Loss                                                        $916

Statement of Retained Earnings:

Net Loss                                                        ($916)

Balance Sheet as of May 31:

Assets:

Current assets:

Cash                                       $ 2,333

Supplies                                      1,100

Prepaid Insurance                     1,350                  $4,783

Long-term assets:

Land                                                       14,833

Buildings                                  71,200

Accumulated depreciation     (3,000) 68,200

Equipment                               16,800

Accumulated depreciation     (2,400)  14,400  $97,433

Total assets                                                       $102,216

Liabilities + Equity:

Current Liabilities:

Accounts Payable                       $ 4,533

Salaries & Wages Payable                740

Mortgage Interest Payable               186

Unearned Rent Revenue                 640           $6,099

Mortgage Payable                                              37,200

Total liabilities                                                  $43,299

Common Stock                            59,833

Net Loss                                            (916)       $58,917

Total Liabilities + Equity                                 $102,216

(d) Identification of accounts to be closed on May 31:

Rent Revenue                                            11,660

Salaries and Wages Expense   3,740

Utilities Expense                          800

Advertising Expense                   500

Insurance Expense                     450

Supplies Expense                     1,500

Depreciation Exp. - Building   3,000

Depreciation Exp-Equipment 2,400

Mortgage Expense                     186

Explanation:

a) Data:

MOTO HOTEL Trial Balance as of May 31, 2017

                                                 Debit          Credit

Cash                                       $ 2,333

Supplies                                    2,600

Prepaid Insurance                     1,800

Land                                         14,833

Buildings                                  71,200

Equipment                               16,800

Accounts Payable                                     $ 4,533

Unearned Rent Revenue                            3,300

Mortgage Payable                                     37,200

Common Stock                                         59,833

Rent Revenue                                             9,000

Salaries and Wages Expense 3,000

Utilities Expense                        800

Advertising Expense                 500

Totals                                 $113,866     $113,866

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