Question

The Blossom Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. BLOSSOM HOTEL Trial Balance May 31, 2022 Debit Credit Cash $ 2,513 Supplies 2,600 Prepaid Insurance 1,800 Land 15,013 Buildings 67,600 Equipment 16,800 Accounts Payable $ 4,713 Unearned Rent Revenue 3,300 Mortgage Payable 33,600 Common Stock 60,013 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $110,626 $110,626 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,070 of unused supplies on May 31. 3. (a) Annual depreciation is $2,760 on the building. (b) Annual depreciation is $2,160 on equipment. 4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,620 has been earned. 6. Salaries of $720 are accrued and unpaid at May 31.

Answer 1

BLOSSOM HOTEL

Trial Balance

May 31, 2022

Debit Credit

Cash $2,513

Supplies $2,600

Prepaid Insurance $1,800

Land $15,013

Buildings $67,600

Equipment $16,800

Accounts Payable $4,713

Unearned Rent Revenue $3,300

Mortgage Payable $33,600

Common Stock $60,013

Retained earnings $4,700

$106,326 $106,326

Rent Revenue $9,000

Salaries and Wages Expense $3,000

Utilities Expense $800

Advertising Expense $500

net income $4,700

adjusting entries:

Dr Insurance expense 450

Cr Prepaid insurance 450

Dr Supplies expense 1,530

Cr Supplies 1,530

Dr Depreciation expense 4,920

Cr Accumulated depreciation building 2,760

Cr Accumulated depreciation equipment 2,160

Dr Interest expense 140

Cr Interest payable 140

Dr Unearned revenue 2,620

Cr Rent revenue 2,620

Dr Wages expense 720

Cr Wages payable 720

BLOSSOM HOTEL

Income Statement

May 31, 2022

Rent Revenue $11,620

Salaries and Wages Expense $3,720

Utilities Expense $800

Supplies expense $1,530

Depreciation expense $4,920

Advertising Expense $500

Insurance expense $450

Interest expense $140

net loss -$440

BLOSSOM HOTEL

Balance Sheet

May 31, 2022

Debit Credit

Cash $2,513

Supplies $1,070

Prepaid Insurance $1,350

Land $15,013

Buildings $64,840

Equipment $14,640

Accounts Payable $4,713

Interest payable $140

Wages payable $720

Unearned Rent Revenue $680

Mortgage Payable $33,600

Common Stock $60,013

Retained earnings ($440)

$99,426 $99,426