Nish Kumar Management Services Inc. began business on January 1. 2006. 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.

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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NISH KUMAR MANAGEMENT SERVICES INC. Work Sheet For the Year Ended December 31, 2006 Trial Balance Account Titles Dr. Cr. Dr. Adjusted Trial Balance Cr. Cash 14,500 14,500 Accounts Receivable 23.600 23.600 Prepaid Insurance 3.100 1,400 Land 56.000 56,000 Building 106,000 106,000 Equipment 49.000 49,000 Accounts Payable 10,400 10,400 Unearned Rent Revenue 5,000 2,800 Mortgage Payable 100.000 100,000 Common Stock 120.000 120,000 Retained Earnings -0- -0- Dividends 20,000 20,000 Service Revenue 75.600 75,600 Rent Revenue 24.000 26,200 Salaries Expense 30,000 30,000 Advertising Expense 17,000 17,000 Utilities Expense 15.800 15.800 Totals 335.000 335.000 Insurance Expense 1.700 Depreciation Expense-Building 2.500 Accumulated Depreciation-Building 2,500 Depreciation Expense-Equipment 3,900 Accumulated Depreciation-Equipment Interest Expense Interest Payable Totals. 3.900 9,000 9.000 350,400 350,400