#Sub part to be solved The Blossom Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. BLOSSOM HOTELTrial BalanceMay 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. 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 for the month of May. E) Prepare a retained earnings statement for the month of May. F) Prepare a classified balance sheet at May 31. G) Identify which accounts should be closed on May 31.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
#Sub part to be solved
The Blossom Hotel opened for business on May 1, 2022. Here is its
| 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 |
|
| (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. |
A) Journalize the
B) Prepare a ledger using T-accounts. Enter the trial balance amounts and
C) Prepare an adjusted trial balance on May 31.
D) Prepare an income statement for the month of May.
E) Prepare a
F) Prepare a classified balance sheet at May 31.
G) Identify which accounts should be closed on May 31.
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