Prepare an income statement for the month of may

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Reference no: EM131811892

The Skyline Motel opned for business on May 1, 2017. It's Trial Balance before adjustment on May 31 is as follows:

Skyline Motel Trial Balance May 31, 2017

Account Number		Debit	Credit
101	Cash	3600
126	Supplies	2150
130	Prepaid Insuranc	1800
140	Land	15000
141	Buildings	61200
149	Equiptment	16600
201	Accounts Payable		11000
208	Unearned Rent Revenue		3200
275	Mortgage Payable		40000
311	Common Stock		35300
429	Rent Revenue		14600
610	Advertising Expense	550
726	Salaries and Wages	3300
732	Utilities Expens	900
		104100	104100

In addition to those accounts listed on the trial balance, the chart of accounts for Skyline Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries 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 $700 of unused supplies on May 31.
3.		Annual depreciation is $3,060 on the buildings and $1,560 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 $800 are accrued and unpaid at May 31.

A: Prepare a Ledger using the three -column form of account. Enter the trial balance amounts into the balance column and then post the adjusting entries.

B: Prepare an Income Statement for the month of May 31.

C: Prepare a Balance Sheet at May 31.

Reference no: EM131811892

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