8. The bookkeeper of Management Associates gave you the unadjusted trial balance at December 31, 1997 and the following additional information:

MANAGEMENT ASSOCIATES

Unadjusted Trial Balance

December 31, 1997

	Debit		Credit
Cash	Rs. 80,000
Investment in marketable securities	100,000
Debtors	165,000
Interest receivable	0
Supplies	28,000
Prepaid rent	14,000
Land	250,000
Buildings	1,200,000
Provision for depreciation, buildings			Rs. 80,000
Creditors			94,000
Bank loan			556,000
Salaries payable			0
Interest payable			0
Capital			250,000
Fees earned			2,000,000
Salaries expense	900,000
Rent expense	200,000
Legal and accounting expense	18,000
Utility expense	10,000
Delivery expense	15,000
Totals	Rs. 2,980,000		Rs. 2,980,000

1. The firm was notified by its broker that it had earned interest revenue of Rs. 10,500 from various marketable securities.

2. Supplies on hand at the end of the year amounted to Rs. 5,000.

3. Prepaid rent of Rs. 9,000 was used during the year.

4. The building was purchased on January 2, 1993 and has no salvage value.

5. The interest rate on the loan is 8%. No interest has been paid since July 1, 1997.

6. Salaries payable at year-end amounted to Rs. 25,000.

7. The December 1997 telephone bill of Rs. 4,500 arrived in January 1998 and was not included in the utility expense of Rs. 10,000 listed in the unadjusted trial balance. Use the accruals account.

Required

1. Set up T accounts with the December 31, 1997 balances from the unadjusted trial balance.

2. Make the adjusting entries in the general journal. Set up new accounts where appropriate.

3. Post the adjusting entries to the ledger accounts.

4. Prepare an adjusted trial balance.

5. Prepare an income statement, retained earnings statement, and balance sheet.

6. Make the closing entries.

7. Post the closing entries to the ledger accounts.

8. Prepare a post-closing trial balance.