Marsteller Properties, Inc., owns apartments that it rents to university students. At December 31, 2009, the following
Question:
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 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...
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger