After the success of the company?s first two months, Santana Rey continues to operate Business Solutions. (Transactions for the first two months are described in the Chapter 2 serial problem.) The November 30, 2018, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows.

Business Solutions had the following transactions and events in December 2018.

Dec. 2 Paid $1,025 cash to Hillside Mall for Business Solutions?s share of mall advertising costs.

3 Paid $500 cash for minor repairs to the company?s computer.

4 Received $3,950 cash from Alex?s Engineering Co. for the receivable from November.

10 Paid cash to Lyn Addie for six days of work at the rate of $125 per day.

14 Notified by Alex?s Engineering Co. that Business Solutions?s bid of $7,000 on a proposed project has been accepted. Alex?s paid a $1,500 cash advance toBusiness Solutions. Purchased $1,100 of computer supplies on credit from 15 Harris Office Products.

16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.

20 Completed a project for Liu Corporation and received $5,625 cash.

22?26 Took the week off for the holidays.

28 Received $3,000 cash from Gomez Co. on its receivable.

29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile).

31 The company paid $1,500 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company?s first three months:

a. The December 31 inventory count of computer supplies shows $580 still available.

b. Three months have expired since the 12-month insurance premium was paid in advance.

c. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day.

d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.

e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.

f. Three of the four months? prepaid rent have expired.

Required

1. Prepare journal entries to record each of the December transactions and events for Business Solutions. Post those entries to the accounts in the ledger.

2. Prepare adjusting entries to reflect a through f. Post those entries to the accounts in the ledger.

3. Prepare an adjusted trial balance as of December 31, 2018.

4. Prepare an income statement for the three months ended December 31, 2018.

5. Prepare a statement of retained earnings for the three months ended December 31, 2018.

6. Prepare a balance sheet as of December 31, 2018.

7. Record and post the necessary closing entries as of December 31, 2018.

8. Prepare a post-closing trial balance as of December 31, 2018.

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No. Account Title Debit Credit $38,264 101 Cash ... 106 12,618 Accounts receivable.. 126 Computer supplies . 2,545 128 Prepaid insurance.. 2,220 Prepaid rent ... 3,300 131 Office equipment . 163 8,000 Accumulated depreciation-Office equipment.. 164 167 Computer equipment 20,000 Accumulated depreciation-Computer equipment Accounts payable 168 201 210 Wages payable .. Unearmed computer services revenue 236 Common stock .... Retained eamings... 307 73,000 318 319 Dividends . 5,600 403 Computer services revenue 25,659 612 Depreciation expense-Office equipment Depreciation expense-Computer equipment.. 613 2,625 623 Wages expense 637 Insurance expense Rent expense ... Computer supplies expense Advertising expense.. Mileage expense 640 652 655 1,728 676 704 Miscellaneous expenses 677 250 684 Repairs expense-Computer Totals 805 $98,659 $98,659