er Debit Credit 101 Cash $ 3,500 126 Supplies 2,080 130 Prepaid Insurance 2,40
P3-2A Mac’s Motel opened for business on May 1, 2017. Its
MAC’S MOTEL
Trial Balance
May 31, 2017
Account Number Debit Credit
101 Cash $ 3,500
126 Supplies 2,080
130 Prepaid Insurance 2,400
140 Land 12,000
141 Buildings 60,000
149 Equipment 15,000
201 Accounts Payable $ 4,800
208 Unearned Rent Revenue 3,300
275 Mortgage Payable 40,000
301 Owner’s Capital 41,380
429 Rent Revenue 10,300
610 Advertising Expense 600
726 Salaries and Wages Expense 3,300
732 Utilities Expense 900
$99,780 $99,780
In addition to those accounts listed on the trial balance, the chart of accounts for Mac’s
Motel also contains the following accounts and account numbers: No. 142 Accumulated
Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
1. Prepaid insurance is a 1-year policy starting May 1, 2017.
2. A count of supplies shows $750 of unused supplies on May 31.
3. Annual depreciation is $3,000 on the buildings and $1,500 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 $750 are accrued and unpaid at May 31.
(c) Adj. trial balance $37,944
Prepare
post, and prepare adjusted
trial balance and fi nancial
statements.
140 3 Adjusting the Accounts
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 an owner’s equity statement for the month of May
and a balance sheet at May 31
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