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Vang Hotel 2500

Price: $2.50


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


Vang Hotel
Trial Balance
31-May-12
Cash   2,500
Prepaid Insurance   1,800
Supplies   2,600
Land   15,000
Lodge   70,000
Furniture   16,800
Accounts Payable   4,700
Unearned Rent Revenue   3,300
Mortgage Payable   36,000
Common Stock   60,000
Rent Revenue   9,000
Salaries 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.

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