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.

Â	Cash Receipts	Cash Payments
Jarvis investment for trailer	$100,000	Â
park shares	Â	Â
Land	Â	$168,600
Building	Â	216,000
Office equipment	Â	8,000
Mortgage payable	350,000	Â
Insurance	Â	4,800
Wages	Â	4,500
Maintenance	Â	400
Office supplies	Â	300
Utilities	Â	900
Property taxes	Â	6,000
Jarvis, salary	Â	10,500
Rental sales revenue	60,000	Â
Mortgage interest expense	Â	4,667
Mortgage principal payments, Jan.	Â	2,000
and Feb.	Â	Â

d. The wages are for the maintenance worker who worked but has not yet been paid for five days during the period ending March 31. The wage is $9.00 per hour and the work day is eight hours.

e. An invoice for grounds maintenance expense of $80 has not yet been paid.

f. There are $100 in office supplies remaining in inventory.

g. The March utility bill has not yet been received. It is estimated to be $400.

h. The property taxes were paid in January for the entire year.

i. A rental tenant whose rent is $200 has not yet paid for March.

j. Included in the $60,000 received for rental income to date is the amount for a tenant who has prepaid for the entire year. The rent is $175 per month.

k. No interest or principal has been paid on the mortgage for March. Interest for March is $2,333. Principal payments for the balance of the year (including March) are $12,000.

l. The income tax is 25 percent of operating income and is payable in April. Using accrual based accounting, prepare an income statement for the three months ending March 31 and a balance sheet as of March 31.