Porter Management Services Inc. began business on January 1, 1996, with a capital investment of \(\$ 120,000\). The company manages condominiums for owners (Fees Earned) and rents space in its own office building (Rent Revenue). The trial and adjusted trial balance columns of the work sheet at the end of the first year are as follows:

\section*{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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PORTER MANAGEMENT SERVICES INC. Work Sheet For the Year Ended December 31, 1996 Account Titles Trial Balance Adjusted Trial Balance Dr. Cr. Dr. Cr. Cash 12,500 12,500 Accounts Receivable 23,600 23,600 Prepaid Insurance 3,100 1,600 Land 56,000 56,000 Building 106,000 106,000 Equipment 48,000 48,000 Accounts Payable 10,400 10,400 Unearned Rent Revenue 4,000 1,800 Mortgage Payable 100,000 100,000 Common Stock 90,000 90,000) Retained Earnings Dividends 30,000 30,000 20,000 20,000 Fees Earned 75,600 75,600 Rent Revenue 24,000 26,200 Salaries Expense 32,000 32,000 Advertising Expense 17,000 17,000 Utilities Expense 15,800 15,800 Totals 334,000 334,000 Insurance Expense 1,500 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 12,000 12,000 352,400 352,400