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    Financial Statements for Rebecca Sherrick Management Service

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    P3-4B Rebecca Sherrick Management Services Inc. began business on January 1, 2002, with
    a capital investment of $120,000. The company manages condominiums for owners (Service Revenue) and rents space in its own office building (Rent Revenue). The trial balance and adjusted trial balance columns of the work sheet at the end of the first year are as follows.
    Account Income Statement Balance Sheet

    REBECCA SHERRICK MANAGEMENT SERVICES INC.
    Work Sheet
    For the Year Ended December 31, 2002
    Adjusted
    Trial Balance Trial Balance

    Account Titles Dr. Cr. Dr. Cr.
    Cash 14,500 14,500
    Accounts Receivable 23,600 23,600
    Prepaid Insurance 3,100 1,600
    Land 56,000 56,000
    Building 106,000 106,000
    Equipment 48,000 48,000
    Accounts Payable 10,400 10,400
    Unearned Rent Revenue 5,000 1,800
    Mortgage Payable 100,000 100,000
    Common Stock 90,000 90,000
    Retained Earnings 30,000 30,000
    Dividends 20,000 20,000
    Service Revenue 75,600 75,600
    Rent Revenue 23,000 26,200
    Salaries Expense 30,000 30,000
    Advertising Expense 17,000 17,000
    Utilities Expense 15,800 15,800
    Totals 334,000 334,000
    Insurance Expense 1,500
    Depreciation Expense-Building 2,500
    Accumulated Depreciation-Building 2,500
    Depreciation Expense-Equipment 3,900
    Accumulated Depreciation-Equipment 3,900
    Interest Expense 10,000
    Interest Payable 10,000
    Totals 350,400 350,400
    Instructions
    (a) Prepare a complete work sheet.
    (b) Prepare a classified balance sheet. (Note: $10,000 of the mortgage payable is due for payment
    next year.)
    (c) Journalize the adjusting entries.
    (d) Journalize the closing entries.
    (e) Prepare a post-closing trial balance.

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    Solution Summary

    The solution is in excel format that shows the calculations necessary for the preparation of 1) A work Sheet, 2) Classified Balance Sheet, 3) Adjusting Entries, 4) Closing Entries, & 5) Post Closing Trial Balance for Rebecca Sherrick Management Services, Inc.

    $2.19