(A) RUSTHE MANAGEMENT SERVICES

Worksheet
For the Year Ended December 31, 2020
Adjusted Income
Account Titles Trial Balance Adjustments Trial Balance Statement Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.

Cash 13,800 13,800 13,800

Accounts Receivable 28,300 28,300 28,300
Prepaid Insurance 3,600 (a) 1,500 2,100 2,100
Land 67,000 67,000 67,000
Buildings 127,000 127,000 127,000
Equipment 59,000 59,000 59,000
Accounts Payable 12,500 12,500 12,500
Unearned Rent Revenue 6,000 (c) 5,000 1,000 1,000
Mortgage Payable 120,000 120,000 120,000
Owner’s Capital 144,000 144,000 144,000
Owner’s Drawings 22,000 22,000 22,000
Service Revenue 90,700 90,700 90,700
Rent Revenue 29,000 (c) 5,000 34,000 34,000
Salaries and Wages
Expense 42,000 42,000 42,000
Advertising Expense 20,500 20,500 20,500
Utilities Expense 19,000 19,000 19,000
Totals 402,200 402,200
Insurance Expense (a) 1,500 1,500 1,500
Depr. Expense (b) 6,600 6,600 6,600
Accum. Depr.—Buildings (b) 3,000 3,000 3,000
Accum. Depr.—Equipment (b) 3,600 3,600 3,600
Interest Expense (d) 10,000 10,000 10,000
Interest Payable (d) 10,000 10,000 10,000
Totals 23,100 23,100 418,800 418,800 99,600 124,700 319,200 294,100
Net Income 25,100 25,100
Totals 124,700 124,700 319,200 319,200

Key: (a) Expired Insurance; (b) Depreciation Expense—Building and Equipment; (c) Rent Revenue Recognized; (d) Accrued Interest Payable.
Section B RUSTHE MANAGEMENT SERVICES
Balance Sheet
December 31, 2020

Assets
Current assets
Cash ............................................................ $13,800
Accounts receivable ................................... 28,300
Prepaid insurance ...................................... 2,100
Total current assets .......................... $ 44,200
Property, plant, and equipment
Land ............................................................ 67,000
Buildings ..................................................... $127,000
Less: Accumulated
depreciation—buildings ........................ 3,000 124,000
Equipment .................................................. 59,000
Less: Accumulated
depreciation—equipment ...................... 3,600 55,400 246,400
Total assets ........................................ $290,600

Liabilities and Owner’s Equity

Current liabilities
Mortgage payable (due in 2021) ....................................... $45,000
Accounts payable ............................................................... 12,500
Interest payable .................................................................. 10,000
Unearned rent revenue ...................................................... 1,000
Total current liabilities ............................................ $ 68,500
Long-term liabilities
Mortgage payable............................................................... 75,000
Total liabilities .......................................................... 143,500
Owner’s equity
Owner’s capital
($144,000 + $25,100 – $22,000) .......................................... 147,100
Total liabilities and owner’s equity ........................ $290,600
Section C
Dec. 31 Insurance Expense .............................................. 1,500
Prepaid Insurance ................................ 1,500

Depreciation Expense ................................... 6,600

Accumulated Depreciation—
Buildings ........................................... 3,000
Accumulated Depreciation—
Equipment......................................... 3,600

Unearned Rent Revenue .............................. 5,000

Rent Revenue ........................................ 5,000

Interest Expense ............................................ 10,000

Interest Payable .................................... 10,000

Section D: Dec. 31 Service Revenue ................................... 90,700

Rent Revenue ........................................ 34,000
Income Summary ................................. 124,700

Dec. 31 Income Summary.......................................... 99,600

Salaries and Wages Expense ............... 42,000
Advertising Expense ............................ 20,500
Utilities Expense ................................... 19,000
Interest Expense ................................... 10,000
Depreciation Expense .......................... 6,600
Insurance Expense ............................... 1,500

Dec. 31 Income Summary.......................................... 25,100

Owner’s Capital ................................... 25,100

Dec. 31 Owner’s Capital ............................................ 22,000

Owner’s Drawings ............................... 22,000
Section E RUSTHE MANAGEMENT SERVICES
Post-Closing Trial Balance
December 31, 2020

Debit Credit
Cash .......................................................................... $ 13,800
Accounts Receivable ................................................ 28,300
Prepaid Insurance ................................................... 2,100
Land .......................................................................... 67,000
Buildings ................................................................... 127,000
Accumulated Depreciation—Buildings ................. $ 3,000
Equipment ................................................................ 59,000
Accumulated Depreciation—Equipment .............. 3,600
Accounts Payable ..................................................... 12,500
Interest Payable ....................................................... 10,000
Unearned Rent Revenue ......................................... 1,000
Mortgage Payable .................................................... 120,000
Owner’s Capital ....................................................... 147,100
$297,200 $297,200