The operations of Sunset Realty consist of obtaining listings of houses being offered for sale by owners, advertising these houses, and showing them to prospective buy¬

ers. The company earns revenue in the form of commissions. The building and office equipment used in the business were acquired on January 1 of the current year and were immediately placed in use. Useful life of the building was estimated to be 30 years and that of the office equipment 8 years. The company closes its accounts monthly; on March 31 of the current year, the trial balance is as follows: LO8

Instructions From the trial balance and supplementary data given, prepare the following as of March 31, 19 _ a Adjusting entries for depreciation during March of building and of office equip¬
ment.
(Building: $72,000 cost -e 30 years x ^ = one month’s depreciation)
(Office equipment: $24,000 cost -e 8 years x u = one month’s depreciation)
b Adjusted trial balance.
c Income statement for the month of March and a balance sheet at March 31 in report form. In the owner’s equity section of the balance sheet, show the changes in owner’s capital during March as in the illustration on page 103. d Closing entries, e After-closing trial balance.

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Cash U.S. government bonds. Accounts receivable. Land SUNSET REALTY Trial Balance March 31, 19 Building Accumulated depreciation: building Office equipment. Accumulated depreciation: office equipment. Notes payable Accounts payable Ellen Norton, capital. Ellen Norton, drawing. Commissions earned Advertising expense. Automobile rental expense Salaries expense. Telephone expense Debit $ 6,500 Credit 8,000 5,000 25,000 72,000 400 24,000 500 81,000 10,000 46,100 2,000 20,000 900 700 13,300 600 $158,000 $158,000