P2.8 George Jarvis purchased a trailer park on January 1, 0004. It is now March 31. George has no accounting training but has kept a record of his cash receipts and cash payments for the three months (see next page):

As Mr. Jarvis’s accountant, you discover the following additional information:

a. The building has an estimated life of 20 years and straight-line depreciation is used.

b. The office equipment has a five-year life with a trade-in value of $500.

c. The insurance was prepaid on January 1 for the entire year.