Question

Sunland Management Services began business on January 1, 2020, with a capital investment of $137,200. 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 worksheet at the end of the first year are as follows. Sunland Management Services Worksheet For the Year Ended December 31, 2020 Trial Balance Adjusted Trial Balance Dr. Cr. Dr. Cr. Cash 13,500 13,500 Accounts Receivable 28.000 28,000 Prepaid Insurance 3,660 2.440 Land 65.700 65,700 Buildings 126,300 126,300 Equipment 59.400 59.400 Accounts Payable 12.100 12.100 Unearned Rent Revenue 6,200 1.900 Mortgage Payable 137,200 137,200 Owner's Capital 125,160 125,160 Owner's Drawings 22.500 22.500 Service Revenue 91,900 91.900 Rent Revenue 28,600 32,900 Salaries and Wages Expense 42,400 42,400 Advertising Expense 20.700 20,700 Utilities Expense 19.000 19,000 Totals 401,160 401,160 Insurance Expense 1,220 Depreciation Expense 6,800 Accumulated Depreciation-Buildings 3,000 Accumulated Depreciation-Equipment 3,800 Interest Expense 11.900 Interest Payable 11.900 Totals 419.860 419,860

Answer 1

Preparing the Worksheet at the end of first Year:-

Sunland Management Services

Worksheet

For the Year Ended December 31,2020

Accounts	Unadjusted	Trial Balance	Adjustments		Adjusted	Trial Balance	Income	Statement	Balance	Sheet
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$13,500				$13,500				$13,500
Accounts Receivable	28,000				28,000				28,000
Prepaid Insurance	3,660			$1,220	2,440				2,440
Land	65,700				65,700				65,700
Buildings	126,300				126,300				126,300
Equipment	59,400				59,400				59,400
Accounts Payable		$12,100				$12,100				$12,100
Unearned Rent Revenue		6,200	4,300			1,900				1,900
Mortgage Payable		137,200				137,200				137,200
Owner's Capital		125,160				125,160				125,160
Owner's Drawings	22,500				22,500				22,500
Service Revenue		91,900				91,900		$91,900
Rent Revenue		28,600		4,300		32,900		32,900
Salaries and Wages Expense	42,400				42,400		$42,400
Advertising Expense	20,700				20,700		20,700
Utilities Expense	19,000				19,000		19,000
Totals	$401,160	$401,160
Insurance Expense			1,220		1,220		1,220
Depreciation Expense			6,800		6,800		6,800
Accumulated Depreciation, Buildings				3,000		3,000				3,000
Accumulated Depreciation, Equipment				3,800		3,800				3,800
Interest Expense			11,900		11,900		11,900
Interest Payable				11,900		11,900				11,900
Totals			$24,220	$24,220	$419,860	$419,860	$102,020	$124,800	$317,840	$295,060
						Net Income	$22,780			$22,780
						Totals	$124,800	$124,800	$317,840	$317,840