USA: +1 (725) 712-1730 
Sign in
MAC’S MOTEL Trial Balance May 31, 2017 Debit Credit Account Number 101 126 130 Cash Supplies Prepaid Insurance 3,500 2,080 2,400 12,000 60,000 15,000 141 149 201 208 275 301 429 610 726 732 Buildings Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable Owner’s Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $4,800 3,300 40,000 41,380 10,300 600 3,300 900 $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 Depreciation-Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Sala- ries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 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.
Expert Answer
Mac’s Motel
Adjusting Entries as on May 31:
Date Account Titles and Explanation Debit Credit
- Insurance Expense $200
Prepaid Insurance $200
(To record insurance expense for 1 month – $2,400 x 1/12 = $200)
- Supplies Expense $1,330
Supplies $1,330
(To record supplies used for the month ending May 31 $2,080 – $750 =$1,330)
- Depreciation Expense $375
Accumulated Depreciation – Buildings $250
Accumulated Depreciation – Equipment $125
(To record depreciation expense on building and equipment for 1 month)
($3,000 x 1/12 = $250 $1,500 x 1/12 = $125)
- Interest Expense $400
Interest Payable $400
(To record 1 month interest expense on mortgage $40,000 x 12% x 1/12 = $400)
- Unearned Rent Revenue $2,200
Rent Revenue $2,200
(To record rent revenue earned in May $3,300 x 2/3 =$2,200)
- Salaries and Wages Expense $750
Salaries and Wages Payable $750
(To record salaries accrued and unpaid at May 31)
Adjusted Trial Balance of Mac Motels for the month May 31, 2017
Account Number Account Titles Debit Credit
101 Cash $3,500
126 supplies $750
130 Prepaid Insurance $2,200
140 Land $12,000
141 Buildings $60,000
142 Accumulated Depreciation –Buildings $250
149 Equipment $15,000
150 Accumulated Depreciation –Equipment $125
201 Accounts Payable $4,800
208 Unearned Rent Revenue $1,100
212 Salaries and Wages Payable $750
230 Interest Payable $400
275 Mortgage Payable $40,000
301 Owner’s Capital $41,380
429 Rent Revenue $12,500
610 Advertising Expense $600
619 Depreciation Expense $375
631 Supplies Expense $1,330
718 Interest Expense $400
722 Insurance Expense $200
726 Salaries and Wages Expense $4,050
732 Utilities Expense $900
Total $101,305 $101,305
D Income Statement of Mac Motels for the month ended May 31
Revenues –
Rent Revenue $12,500
Total revenues $12,500
Expenses –
Depreciation Expense $375
Advertising Expense $600
Salaries and Wages Expense $4,050
Insurance Expense $200
Interest expense $400
Supplies Expense $1,330
Utilities Expense $900
Total Expenses $7,855
Net Income $4,645
Mac’s Motel
Owner’s Equity Statement for the month of May
Owner’s Capital $41,380
Add: Net Income $4,645
Total $46,025
Less: Drawings —
Owner’s Capital, May 31 $46,025
