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Class Exercise 3
Class Exercise 3
Class Exercise 3
Supplies NO 126
Date Explanation Ref Debit Credit Balance
May 31 Balance / 2,080 2,080
May 31 Adjusting J1 1,330 750
Depreciation Expense NO 619
Date Explanation Ref Debit Credit Balance
May 31 Adjusting J1 300 300
May 31 Adjusting J1 125 425
Hank’s Hotel
Trial Balance
May 31, 2020
Unadjusted Adjustments Adjusted Trial
Trial Balance
Balance
AC Account Title Debit Credit Debit Credit Debit Credit
C
NO
101 Cash 3,400 3,400
126 Supplies 2,080 1,330 750
130 Prepaid Insurance 2,400 200 2,200
140 Land 12,000 12,000
141 Building 60,000 60,000
149 Equipment 15,000 15,000
142 Accumulated Depreciation 0 300 300
- Building
150 Accumulated Depreciation 0 125 125
- Equipment
201 Account Payable 4,700 4,700
208 Unearned Rent Revenue 3,300 2,200 1,100
212 Salaries and Wages Payable 0 750 750
230 Interest Payable 0 200 200
275 Mortgage Payable 40,000 40,000
301 Hank’s, Capital 41,380 41,380
429 Rent Revenue 10,300 2,200 12,500
610 Advertising Expense 600 600
619 Depreciation Expense 0 425 425
631 Supplies Expense 0 1,330 1,320
718 Interest Expense 0 200 200
722 Insurance Expense 0 200 200
726 Salaries and Wages Expense 3,300 750 4,050
732 Utilities Expense 900 900
TOTAL 99,680 99,680 5,105 5,105 101,055 101,055
d. Prepare an income statement and an owner’s equity statement for the month of May and a
balance sheet at May 31.
i) Income Statement
Hank’s Hotel
Income Statement
For Month Ended May 31, 2020
Revenue
Rent revenue 12,500
Total Revenue 12,500
Expense
Advertising Expense 600
Depreciation Expense 425
Supplies Expense 1,330
Salaries and Wages Expense 4,050
Utilities Expense 900
Interest Expense 200
Insurance Expense 200
Total Expense 7,705
Net Income 4,795
Hank’s Hotel
Statement of Changes in Equity
For Month Ended
Hank, Capital, May 1 0
Add: Investment by Owner 41,380
Net Profit 4,795 46,175
46,175
Less: Withdrawal by owner 0
Hank, Capital, May 31 46,175
Hank’s Hotel
Balance sheet
As at 31 May 2021
Current assets
Cash 3,400
Non-current assets
Supplies 750
Prepaid insurance 2,200
Land 12,000
Buildings 60,000
Accumulated depreciation-building (300)
59,700
Equipment 15,000
Accumulated depreciation-equipment (125)
14,875
Total non-current assets 89,525
Total assets 92,925
Current liability
Accounts payable 4,700
Unearned rent revenue 1,100
Interest payable 200
Salaries and wages payable 750
Total current liability 6,750
Non-current liability
Mortgage payable 40,000
46,750
Equity
Owner’s capital 46,175
Total liability and equity 92,925
QUESTION 2
10 Cash 3,620
Accounts receivable 3,620
12 Cash 3,100
Service revenue 3,100
15 Equipment 2,000
Accounts payable 2,000
17 Supplies 700
Accounts payable 700
29 Cash 600
Unearned service 600
Expense
Salaries and wages expense 3,050
Rent expense 400
Supplies expense 1,100
Depreciation expense 200
Total expense 4,750
Non-current assets
Supplies 1,400
Equipment 14,000
Accumulated depreciation-equipment (2,200)
11,800
Total non-current assets 13,200
Total assets 19,250
Current liability
Accounts payable 2,600
Unearned service revenue 580
Salaries and wages payable 350
Total current liability 3,530
Equity
Owner’s capital 15,720
Total liability and equity 19,250