Marsteller Properties, Inc., owns apartments that it rents to un

Marsteller Properties, Inc., owns apartments that it rents to university students. At December 31, 2009, the following unadjusted account balances were available:

Cash ..................... $ 4,600

Rent Receivable ................ 32,500

Supplies .................... 4,700

Prepaid Insurance ................. 60,000

Buildings ...................4,560,000

Accumulated Depreciation, Buildings .......1,015,000

Land .................... 274,000

Other Assets ................. 26,100

Accounts Payable ............... 57,300

Mortgage Payable (due in 2011) ..........2,000,000

Common Stock ................1,500,000

Retained Earnings, 12/31/2008 .......... 39,200

Rent Revenue .................. 660,000

Maintenance Expense ............... 73,200

Rent Expense .................. 58,700

Wages Expense ................ 84,300

Utilities Expense ................ 3,400

Interest Expense ................ 90,000

The following information is available for adjusting entries:

a. An analysis of apartment rental contracts indicates that $3,800 of apartment rent is unbilled and unrecorded at year-end.

b. A physical count of supplies reveals that $1,400 of supplies are on hand at December 31, 2009.

c. Annual depreciation on the buildings is $204,250

d. An examination of insurance policies indicates that $12,000 of the prepaid insurance applies to coverage for 2009.

e. Six months’ interest at 9 percent is unrecorded and unpaid on the mortgage payable.

f. Wages in the amount of $6,100 are unpaid and unrecorded at December 31.

g. Utilities costs of $300 are unrecorded and unpaid at December 31. h. Income taxes, 15 percent of income before taxes, is unrecorded and unpaid at

December 31.


Required:

1. Prepare a worksheet for Marsteller Properties, Inc.

2. Prepare an income statement, a statement of changes in retained earnings, and a classified balance sheet for Marsteller Properties, Inc.

3. Prepare the closing entries.


Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...