Thayer Motel: Adjusting entries, T-accounts, prepare financi
Not what you're looking for?
P3-2A
The Thayer Motel Inc. opened for business on May 1, 2006. Its trial balance before
adjustment on May 31 is as follows.
THAYER MOTEL INC.
Trial Balance
May 31, 2006
Account
Number Debit Credit
101 Cash 2,500
126 Supplies 1,900
130 Prepaid Insurance 2,400
140 Land 15,000
141 Lodge 70,000
149 Furniture 16,800
201 Accounts Payable 5,300 208 Unearned Rent 4,600
275 Mortgage Payable 35,000
311 Common Stock 60,000
332 Dividends 1,000
429 Rent Revenue 9,200
610 Advertising Expense 500
726 Salaries Expense 3,000
732 Utilities Expense 1,000
$114,100 $114,100
In addition to those accounts listed on the trial balance, the chart of accounts for Thayer Motel
also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-
Lodge, No. 150 Accumulated Depreciation-Furniture, No. 212 Salaries Payable, No. 230
Interest Payable, No. 320 Retained Earnings, No. 619 Depreciation Expense-Lodge, No. 621
Depreciation Expense-Furniture, No. 631 Supplies Expense, No. 718 Interest Expense, and
No. 722 Insurance Expense.
Other data:
1. Insurance expires at the rate of $200 per month.
2. A count of supplies shows $900 of unused supplies on May 31.
3. Annual depreciation is $2,400 on the lodge and $3,000 on furniture.
4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $800 are accrued and unpaid at May 31.
Instructions
(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts
and post the adjusting entries. (Use J1 as the posting reference.)
(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 balance sheet at May 31.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to journalize the adjusting entries on May 31.
Solution Preview
The Thayer Motel Inc. opened for business on May 1, 2006. Its trial balance before
adjustment on May 31 is as follows.
THAYER MOTEL INC.
Trial Balance
May 31, 2006
Account
Number Debit Credit
101 Cash 2,500
126 Supplies 1,900
130 Prepaid Insurance 2,400
140 Land 15,000
141 Lodge 70,000
149 Furniture 16,800
201 Accounts Payable 5,300 208 ...
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.