4. Prepare an income statement for the three months ended December 31, 2019.
5. Prepare a statement of retained earnings for the three months ended December 31, 2019.
Imageshunterstock SP 3 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, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows. Debit Credit $38,264 12,618 2.545 2,220 3.300 8,000 S 0 20,000 0 0 0 0 No. Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-Office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals 73,000 0 5,600 25.659 0 0 2,625 0 0 0 1,728 704 250 805 $98,659 $98,659 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. Three of the four months' prepaid rent have expired. Business Solutions had the following transactions and Page 139 events in December 2019. 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 to Business Solutions. 15 Purchased $1,100 of computer supplies on credit from 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. Business Solutions Det Balance Date Dubai Credit Balance Dut Account Receivable Computer Supplies $123 $12.4 Opel $ 2. bal 15- DS 1.100 S 3,645 11. Dubai Credit Prepaid insurance $ 2.230 5 565 TA Date Detall C Balance Da Cash Spal $ 1,025 $37,239 500 1.2 -DS90 $401 S 16.SI 5414 20-Dee S 5. $42.066 $ 2,20 S 1 S 10 $49.23 SISAL clip usun.llops..ollip Aspeli Hill Accapable S 1.100 1.1 Weg Well Lip Service 1.1. $ S Telal helene my SD 11-10 S1, $11.2 phal 11. Sin $14. M. 11-15 14,00 S 11-Dec 57.100 Depren profit pripr-Computer 5 11- DS 10 $ 1.200 Opal 52.005 110 10 S . computer Service Opel S2 $25.490 $ 29 S 11.50 31-Dec $325 $ S 35 Computer supplies 31-Der Advertisingepee $ 1.72 $ 1.7 $ 31-Dec $ 24 S 2423 $ 2.06 Op bal 31-0 $ 2.7535 Mile pe $ Op bal $ 704 Opal $ Hepairs expense Computer 230 Op bal $ Det 21.Det $ 1,3055 31-Dec $
