Answer:
A)
Dr insurance expense 450
Cr Prepaid insurance 450
Dr Supplies expense 1,530
Cr Supplies 1,530
Dr Depreciation expense 410
Cr Accumulated depreciation - building 230
Cr Accumulated depreciation - equipment 180
Dr Interest expense 140
Cr Interest payable - mortgage 140
Dr Unearned rent revenue 2,620
Cr Rent revenue 2,620
Dr Wage expense 720
Cr Wages payable 720
B)
Prepaid insurance - Assets
Dr Cr
5/1 $1,800 5/31 $450 expired insurance
Supplies - Assets
Dr Cr
5/1 $2,600 5/31 $1,530 used supplies
Building - Assets
Dr Cr
5/1 $67,600 5/31 $230 accumulated depreciation
Land - Assets
Dr Cr
5/1 $15,013
Cash - Assets
Dr Cr
5/1 $2,513
Equipment - Assets
Dr Cr
5/1 $16,800 5/31 $180 accumulated depreciation
Mortgage - Liabilities
Dr Cr
5/1 $33,600
5/31 $140 interest payable
Unearned rent revenue - Liabilities
Dr Cr
5/31 $2,600 5/1 $3,300
Wages payable - Liabilities
Dr Cr
5/31 $720
Accounts payable - Liabilities
Dr Cr
5/31 $4,713
Common stock - Equity
Dr Cr
5/31 $60,013
Rent revenue - Revenue
Dr Cr
5/31 $9,000
5/31 $2,620
Salaries and wage expense - Expenses
Dr Cr
5/31 $3,000
5/31 $720
Utilities expense - Expenses
Dr Cr
5/31 $800
Advertising expense - Expenses
Dr Cr
5/31 $500
C) adjusted trial balance
<u>Assets</u>
Current assets:
Cash $2,513
Supplies $1,070
Prepaid insurance $1,350
Non-current assets:
Land $15,013
Buildings $67,370
Equipment $16,620
total ASSETS = $103,936
<u>Liabilities</u>
Current liabilities:
Interest payable $140
Unearned rent revenue $680
Wages payable $720
Accounts payable $4,713
Long term liabilities:
Mortgage $33,600
total LIABILITIES = $39,853
<u>Equity</u>
Common stock $60,013
Retained earnings $4,070
total EQUITY = $64,083
ASSETS = LIABILITIES + EQUITY
$103,936 = $39,853 + $64,083
D) income statement
total revenue = $9,000 + $2,620 = $11,620
- wages expense = $3,000 + $720 = ($3,720)
- insurance expense = ($450)
- supplies expense = ($1,530)
- depreciation expense = ($410)
- interest expense = ($140)
- Utilities expense = ($800)
<u>- Advertising expense = ($500) </u>
net income $4,070
E) retained earnings statement
Retained earnings May 1 $0
<u>Net income May 31 $4,070</u>
total $4,070
F) classified trial balance
<u>Assets</u>
Current assets $4,933
Non-current assets $99,003
total ASSETS = $103,936
<u>Liabilities</u>
Current liabilities $6,253
Long term liabilities $33,600
total LIABILITIES = $39,853
<u>Equity</u>
Common stock $60,013
Retained earnings $4,070
total EQUITY = $64,083
ASSETS = LIABILITIES + EQUITY
$103,936 = $39,853 + $64,083
G) the accounts that must be closed against the income summary account are all the revenue and expense accounts used to calculate the income statement. The income summary account is then closed to retained earnings.
- revenue
- wages expense
- insurance expense
- supplies expense
- depreciation expense
- interest expense
- utilities expense
- advertising expense
