Journalize the Adjusting Entries on May 31

Question 2

Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010. The trial balance at June 30 is as follows.
WAEGELEIN CONSULTING
Trial Balance
June 30, 2010
Debit / Credit
Cash / $6,850
Accounts Receivable / 7,000
Prepaid Insurance / 2,640
Supplies / 2,000
Office Equipment / 15,000
Accounts Payable / $4,540
Unearned Service Revenue / 5,200
Common Stock / 21,750
Service Revenue / 8,000
Salaries Expense / 4,000
Rent Expense / 2,000
$39,490 / $39,490
Other data:
1 / Supplies on hand at June 30 total $980.
2. / A utility bill for $180 has not been recorded and will not be paid until next month.
3. / The insurance policy is for a year.
4. / $3,900 of unearned service revenue has been earned at the end of the month.
5. / Salaries of $1,250 are accrued at June 30.
6. / The office equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. / Invoices representing $3,500 of services performed during the month have not been recorded as of June 30.
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/ Prepare the adjusting entries for the month of June.
Date / Account/Description / Debit / Credit
1. June 30
2. June 30
3. June 30
4. June 30
5. June 30
6. June 30
7. June 30
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/ Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T-Accounts. (List multiple items from largest to smallest amount, e.g. 10, 5, 2.)
Cash / Prepaid Insurance
6/30 Bal. / 6/30 Bal. / 6/30
6/30 Bal.
Accounts Receivable
6/30 Bal. / Supplies
6/30 / 6/30 Bal. / 6/30
6/30 Bal. / 6/30 Bal.
Office Equipment / Salaries Expense
6/30 Bal. / 6/30 Bal.
6/30
Accumulated Depreciation - Office Equipment / 6/30 Bal.
6/30
6/30 Bal. / Rent Expense
6/30 Bal.
Accounts Payable
6/30 Bal. / Depreciation Expense
6/30
Utilities Payable / 6/30 Bal.
6/30
6/30 Bal. / Insurance Expense
6/30
Salaries Payable / 6/30 Bal.
6/30
6/30 Bal. / Utilities Expense
6/30
Unearned Service Revenue / 6/30 Bal.
6/30 / 6/30 Bal.
6/30 Bal. / Supplies Expense
6/30
Common Stock / 6/30 Bal.
6/30 Bal.
Service Revenue
6/30 Bal.
6/30
6/30
6/30 Bal.
/
/ Complete the following adjusted trial balance at June 30, 2010. (If answer is zero, please enter 0, do not leave any fields blank.)
WAEGELEIN CONSULTING
Adjusted Trial Balance
June 30, 2010
Debits / Credits
Cash / $ / $
Accounts Receivable
Prepaid Insurance
Supplies
Office Equipment
Accumulated Depreciation - Office Equipment
Accounts Payable
Utilities Payable
Salaries Payable
Unearned Service Revenue
Common Stock
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense
Insurance Expense
Utilities Expense
Supplies Expense
Totals / $ / $
Question 3

The Olathe Hotelopened for business on May 1, 2010. Here is its trial balance before adjustment on May 31.
OLATHE HOTEL
Trial Balance
May 31, 2010
Debit / Credit
Cash / $2,500
Prepaid Insurance / 1,800
Supplies / 2,600
Land / 15,000
Lodge / 70,000
Furniture / 16,800
Accounts Payable / $4,700
Unearned Rent Revenue / 3,300
Mortgage Payable / 36,000
Common Stock / 60,000
Rent Revenue / 9,000
Salaries Expense / 3,000
Utilities Expense / 800
Advertising Expense / 500
$113,000 / $113,000
Other data:
1. / Insurance expires at the rate of $300 per month.
2. / A count of supplies shows $1,050 of unused supplies on May 31.
3. / Annual depreciation is $3,600 on the lodge and $3,000 on furniture.
4. / The mortgage interest rate is 7%. (The mortgage was taken out on May 1.)
5. / Unearned rent of $2,500 has been earned.
6. / Salaries of $750 are accrued and unpaid at May 31.
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Journalize the adjusting entries on May 31.

Date / Account/Description / Debit / Credit
1. May 31
2. May 31
3. May 31
(To record lodge depreciation.)
(To record furniture depreciation.)
4. May 31
5. May 31
6. May 31

Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.

Cash / Supplies
5/31 Bal. / 5/31 Bal. / 5/31
5/31 Bal.
Prepaid Insurance
5/31 Bal. / 5/31 / Land
5/31 Bal. / 5/31 Bal.
Lodge / Mortgage Payable
5/31 Bal. / 5/31 Bal.
Accumulated Depreciation - Lodge / Common Stock
5/31 / 5/31 Bal.
5/31 Bal.
Rent Revenue
Furniture / 5/31 Bal.
5/31 Bal. / 5/31
5/31 Bal.
Accumulated Depreciation-Furniture
5/31 / Salaries Expense
5/31 Bal. / 5/31 Bal.
5/31
Accounts Payable / 5/31 Bal.
5/31
Utilities Expense
Unearned Rent Revenue / 5/31 Bal.
5/31 / 5/31 Bal.
5/31 Bal. / Advertising Expense
5/31 Bal.
Salaries Payable
5/31 / Interest Expense
5/31 Bal. / 5/31
5/31 Bal.
Interest Payable
5/31 / Insurance Expense
5/31 Bal. / 5/31
5/31 Bal.
Supplies Expense
5/31 / Depreciation Expense-Furniture
5/31 Bal. / 5/31
5/31 Bal.
Depreciation Expense-Lodge
5/31
5/31 Bal.
Incorrect.
Complete the Adjusted Trial Balance as of May 31. (If answer is zero, please enter 0, do not leave any fields blank.)
OLATHE HOTEL
Adjusted Trial Balance
May 31, 2010
Debit / Credit
Cash / $ / $
Prepaid Insurance
Supplies
Land
Lodge
Accumulated Depreciation - Lodge
Furniture
Accumulated Depreciation - Furniture
Accounts Payable
Unearned Rent Revenue
Salaries Payable
Interest Payable
Mortgage Payable
Common Stock
Rent Revenue
Salaries Expense
Utilities Expense
Advertising Expense
Interest Expense
Insurance Expense
Supplies Expense
Depreciation Expense - Lodge
Depreciation Expense - Furniture
$ / $
/
/
/ Incorrect.
Complete the income statement and a retained earnings statement for the month of May and a classified balance sheet at May 31. (List expenses from largest to smallest amount, e.g. 10, 5, 2. If amounts are the same, list alphabetically. List assets in order of liquidity and liabilities from largest to smallest amount, e.g. 10, 5, 2.)
OLATHE HOTEL
Income Statement
Revenues
$
Expenses
$
Total Expenses
Net Income / $
OLATHE HOTEL
Retained Earnings Statement
$
Add:
$
OLATHE HOTEL
Balance Sheet
Assets
Current assets
$
Total current assets
Property, plant, and equipment
$
$
Less:
Less:
Total assets / $
Liabilities and Stockholders’ Equity
Current liabilities
$
Total current liabilities / $
Long-term liabilities
Total liabilities
Stockholders’ equity
Total stockholders’ equity
Total liabilities and stockholders’ equity / $
/