The Skyline Motel opened for business on May 1, 2015. Its trial balance before adjustment on May 31 is as follows.
|
SKYLINE MOTEL
Trial Balance
May 31, 2015
|
| Account Number |
Debit |
Credit |
| 101 |
Cash |
$ 3,538 |
| 126 |
Supplies |
2,118 |
| 130 |
Prepaid Insurance |
2,004 |
| 140 |
Land |
14,670 |
| 141 |
Buildings |
59,760 |
| 149 |
Equipment |
14,880 |
| 201 |
Accounts Payable |
$ 11,580 |
| 208 |
Unearned Rent Revenue |
3,420 |
| 275 |
Mortgage Payable |
40,000 |
| 301 |
Common Stock |
35,166 |
| 429 |
Rent Revenue |
11,653 |
| 610 |
Advertising Expense |
638 |
| 726 |
Salaries and Wages Expense |
3,301 |
| 732 |
Utilities Expense |
910 |
| $101,819 |
$101,819 |
In addition to those accounts listed on the trial balance, the chart of accounts for Skyline Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
1. Prepaid insurance is a 1-year policy starting May 1, 2015.
2. A count of supplies shows $779 of unused supplies on May 31.
3. Annual depreciation is $2,988 on the buildings and $1,488 on equipment.
4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)
5. Two-thirds of the unearned rent revenue has been earned.
6. Salaries of $764 are accrued and unpaid at May 31.
Question 1: Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Post entries in the order of journal entries posted in the previous part of the question.)*
Question 2: Prepare a balance sheet at May 31. (List assets in order of liquidity. List Property, plant and equipment in order of land, buildings and equipment.)