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Homework answers / question archive / The Thayer Motel Inc
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(in excel)
(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.
THAYER MOTEL INC.
Work Sheet
For the Month Ended May 31, 2006
Adjusted Trial Income Statement
Unadjusted Trial Balance Adjustments Balance Statement of Owner's Equity Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Account Titles
101 Cash 2,500 2,500 2,500
126 Supplies 1,900 1,000 900 900
130 Prepaid Insurance 2,400 200 2,200 2,200
140 Land 15,000 15,000 15,000
141 Lodge 70,000 70,000 70,000
142 Accu. Depr.- Lodge 2,400 2,400 2,400
149 Furniture 16,800 16,800 16,800
150 Accu. Depr.- Furniture 3,000 3,000 3,000
201 Accounts Payable 5,300 5,300 5,300
208 Unearned Rent 4,600 2,500 2,100 2,100
212 Salaries Payable 800 800 800
230 Interest Payable 350 350 350
275 Mortgage Payable 35,000 35,000 35,000
311 Common Stock 60,000 60,000 60,000 58,450
320 Retained Earnings
332 Dividends 1,000 1,000 1,000
429 Rent Revenue 9,200 2,500 11,700 11,700
610 Advertising Expense 500 500 500
619 Depreciation Expense - Lodge 2,400 2,400 2,400
621 Depreciation Expense - Furniture 3,000 3,000 3,000
631 Supplies Expense 1,000 1,000 1,000
718 Interest Expense 350 350 350
722 Insurance Expense 200 200 200
726 Salaries Expense 3,000 800 3,800 3,800
732 Utilities Expense 1,000 1,000 1,000
Totals 114,100 114,100 10,250 10,250 120,650 120,650 12,250 107,400 107,400
Net Loss -550 550
11,700 11,700 1,550 60,000
Capital 58,450
60,000 60,000
THAYER MOTEL INC.
Income Statement
For the Month Ended May 31, 2006
Revenue
Rent Revenue 11,700
Advertising Expense 500
Depreciation Expense - Lodge 2,400
Depreciation Expense - Furniture 3,000
Supplies Expense 1,000
Interest Expense 350
Insurance Expense 200
Salaries Expense 3,800
Utilities Expense 1,000
Total Expenses 12,250
Net Loss -550
THAYER MOTEL INC.
Retained Earnings Statement
For the Month Ended May 31, 2006
Balance at the beginning of the month
As originally reported 60,000
Less: Net Loss -550
Less: Withdrawals -1,000
Balance at the end of the month 58,450
THAYER MOTEL INC.
Balance Sheet
May 31, 2006
ASSETS LIABILITIES AND OWNER'S EQUITY
Cash 2,500 Accounts Payable 5,300 5,300
Supplies 900 Unearned Rent 4,600 2,100
Prepaid Insurance 2,200 Salaries Payable 800
Land 15,000 Interest Payable 350
Lodge 70,000 Mortgage Payable 35,000 35,000
Accu. Depr.- Lodge -2,400 67,600 Common Stock 60,000 60,000
Furniture 16,800 Retained Earnings -1,550
Accu. Depr.- Furniture -3,000 13,800
Total Assets 102,000 Total Liabilities and Equity 102,000
Adjusting Entries
May 31, 2006 Insurance Expense 200
Prepaid Expense 200
May 31, 2006 Supplies Expense 1,000
Supplies 1,000
May 31, 2006 Depreciation Expense - Lodge 2,400
Accumulated Depreciation - Lodge 2,400
May 31, 2006 Depreciation Expense - Furniture 3,000
Accumulated Depreciation - Furniture 3,000
May 31, 2006 Interest Expense 350
Interest Payable 350
May 31, 2006 Unearned Rent 2,500
Rent Revenue 1,650 2,500
May 31, 2006 Salaries Expense 800
Salaries Payable 1,650 800
