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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem

Problem 3-71 A Preparing a Worksheet (Appendix 3A)

Marsteller Properties Inc. owns apartments that it rents to university students. At December 31,

2019, the following unadjusted account balances were available:

The following information is available for adjusting entries:

  1. An analysis of apartment rental contracts indicates that S3,800 of apartment rent is unbilled and unrecorded at year end.
  2. A physical count Of supplies reveals that $1,400 of supplies are on hand at December 31 , 2019.
  3. Annual depreciation on the buildings is $204,250.
  4. An examination of insurance policies indicates that $12,000 Of the prepaid insurance applies to coverage for 2019.
  5. Six months' interest at 9% is unrecorded and unpaid on the notes payable.

1.

To determine

To prepare: Worksheet of the company A.

Introduction:.Worksheet is a statement that represents the unadjusted balances of ledgers, adjustment entries and the balances after such adjustments. Adjusted balances are the final balances that are presented in the financial statements of a company.

Explanation

Preparation of worksheet for the period ending 31st December, 2019:

    Account TitleUnadjustedTrial balanceAdjustmentsAdjustedTrial balance
    Dr.Cr.Dr.Cr.Dr.Cr.
    Cash4,6004,600
    Rent receivable32,5003,80036,300
    Supplies4,7003,3001,400
    Prepaid insurance60,00012,00048,000
    Land274,000274,000
    Building4,560,0004,560,000
    Accumulated depriciation-building1,015,000204,2501,219,250
    Other assets26,10026,100
    Accounts payable57,30057,300
    Interest payable90,00090,000
    Notes payable

2.

To determine

To prepare: Income statement, statement of retained earnings and balance sheet.

Introduction: Income statement, statement of retained earnings and balance sheet are financial statements. These statements are prepared for reporting purposes.

6.

To determine

To record: closing journal entries.

Introduction: Closing entries are posted to close all the temporary accounts of the accounting books. Closing entries zeros the balances of income statement items, drawings, and dividends.

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