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101 Required information [The following information applies to the questions displayed below) Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts No. Account Title Debit Credit Cash $48,552 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 3,170 106.5 Liu Corp. 106.6 Gomez Co. 2,808 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. Merchandise Inventory Computer supplies 660 Prepaid Insurance 2,070 131 Prepaid rent 925 163 Office equipment 8.110 164 Accumulated depreciation office equipment 5 210 167 Computer equipment 21,000 @ @ D 119 126 128 in response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10,n/30, FOB shipping point to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119.413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow. Jan. 4 The company paid cash to Lyn Addie for five days' work at the rate of $135 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,100 cash in the company in exchange for more common stock. 7 The company purchased $7,200 of merchandise from Kansas Corp. with terms of 1/18, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,888 cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,480, which is the total price of $6,870 less the advance payment of $1,390. The company debited Uncanned computer Services Revenue for $1,390. 13 The company sold merchandise with a retail value of $4,400 and a cost of $3,400 to Liu Corp., invoice dated January 13 15 The company paid $710 cash for freight charges on the merchandise purchased on January 7. 16. The company received $4,830 cash from Delta Co. for computer services provided 17 The company paid Kansas Corp. for the invoice dated January 7, net of the discount. 20 The company gave a price reduction (allowance) of 5700 to Liu Corp., and credited Llu's accounts receivable for that amount 22 The company received the balance due from Llu Corp., net of the discount and the allowance. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise Invoice cost, net of the discount, was $486. 26 The company purchased $9.900 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination Invoice dated January 26. 26 The company told merchandise with a $4,500 cost for $5,050 on credit to KC, Inc., Invoice dated January 26 31 The company paid cash to Lyn Addie for 10 days work at $135 per day Feb 1 The company paid $2,775 cash to Hillside Mail for another three months' rent in advance 3. The company pold Kansas corp. For the balance due, net of the cash discount, less the 5406 credit from this paid merchandise returned on January 241 Che Feb. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $486. 26 The company purchased $9,980 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26. 26 The company sold merchandise with a $4,500 cost for $5,858 on credit to kc, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $135 per day. 1 The company paid $2,775 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $486 credit from merchandise returned on January 24. 5 The company paid $540 cash to Facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 The company paid a $4,720 cash dividend. 23 The company sold merchandise with a $2,610 cost for $3,200 on credit to Delta Co., Invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $135 per day. 27 The company reimbursed Santana Rey 5320 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 3 The company purchased $2,810 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, Invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $850 cash for minor repairs to the company's computer. 16 The company received 55,360 cash from Dream, Inc. for computing services provided 19 The company paid the full amount due of $3,960 to Marris Office Products, consisting of amounts created on December 15 (of $1,150) and March 8. 24 The company billed Easy Leasing for $9,147 of computing services provided. 25 The company sold merchandise with a $2,052 cost for $2,910 on credit to Wildcat Services, Invoice dated March 25, 30 The company sold merchandise with a $1,168 cost for $2,270 on credit to IPM Company. Invoice dated March 30. 31 The company reimbursed Santana Rey $384 cash for business automobile mileage. The company recorded the reimbursenent as "Mileage Expense." Mar. The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation Check my 31 ine company reimbursea Santana sey >36 casn Tor business automobile mileage. ne company recorded the reimbursement as "Mileage Expense." The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation a. The March 31 amount of computer supplies still available totals $2,175. b. Prepaid Insurance coverage of $690 expired during this 3-month period c. Lyn Addie has not been paid for seven days of work at the rate of $135 per day d. Prepaid rent of $2.775 expired during this 3-month period e. Depreciation on the computer equipment for January 1 through March 31 is $1,070. f. Depreciation on the office equipment for January 1 through March 31 is $210 g. The March 31 amount of merchandise Inventory still available totals $604 4. Prepare an income statement from the adjusted trial balance in part 3) for the three months ended March 31, 2020 (a) Use a single-step format List all expenses without differentiating between selling expenses and general and administrative expenses b) Use a multiple-step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold selling expenses and general and administrative expenses. Categorize the following accounts as selling expenses. Wages Expense. Mileage Expense and Advertising Expense Categorize the remaining expenses as general and administrative Complete this question by entering your answers in the tabs below. Required 4A Required 48 Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Revenues Total revenues Expenses Required information Total revenues Expenses Total expenses 0 $ 0 Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (b) Use a multiple step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative. Show less BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Computer services revenue $ 25,407 Less Sales discounts $ 37 Less Sales returns and allowances 700 737 Net salos 24 670 Sales 18.710 X 25,407 X 37 SI 700 737 BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Computer services revenue Less: Sales discounts $ Less: Sales returns and allowances Net sales Sales Gross loss Expenses Selling expenses Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment X Wages expense Total selling expenses General and administrative AXNANSAS 24,670 18,710 X 5,960 XX 16,554 X 210 X 1.070 X 3.510 21 344 XIX 16,554 210 X 1,070 3,510 x 21,344 Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Total selling expenses General and administrative expenses Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Total general and administrative expenses Total expenses 690 2.775 1,295 540 X 704 X 0 % 850 6,854 28,198 (22,238) S