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.

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.

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. Credit 101 Debit $ 48, 432 0 3,120 0 2,878 0 0 0 0 640 2,097 835 8,100 $ 210 21,900 Account Title Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 106.5 Liu Corp. 106.6 Gomez Co. 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-office equipment 162 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 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 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 1,240 1,200 900 1,430 74,462 8,560 0 0 0 0 0 0 0 0 0 0 0 0 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 $225 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,200 cash in the company in exchange for more common stock. 7 The company purchased $6,800 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,878 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 $5,490, which is the total price of $6,920 less the advance payment of $1,430. The company debited Unearned Computer Services Revenue for $1,430. 13 The company sold merchandise with a retail value of $4,800 and a cost of $3,370 to Liu Corp., invoice dated January 13. 15 The company paid $660 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,030 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 $800 to Liu Corp., and credited Liu's accounts receivable for that amount. 22 The company received the balance due from Liu 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 $9,600 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 $4,530 cost for $5,940 on credit to kc, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $225 per day. Feb. 1 The company paid $2,505 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 $500 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 $4,670 cash dividend. 23 The company sold merchandise with a $2,630 cost for $3,410 on credit to Delta co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $225 per day. 27 The company reimbursed Santana Rey $288 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." Mar. 8 The company purchased $2,780 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 $810 cash for minor repairs to the company's computer. 16 The company received $5,380 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $3,980 to Harris Office Products, consisting of amounts created on December 15 (of $1,200) and March 8. 24 The company billed Easy Leasing for $9,127 of computing services provided. 25 The company sold merchandise with a $2,082 cost for $2,900 on credit to Wildcat Services, invoice dated March 25. 30 The company sold merchandise with a $1,168 cost for $2,350 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $160 cash for business automobile mileage. The 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 $2,055. b. Prepaid Insurance coverage of $699 expired during this 3-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $225 per day. d. Prepaid rent of $2,505 expired during this 3-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,240. 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 $504. 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 4B 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 0 Total revenues Expenses Total expenses 0 $ 0 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. (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 0 Net sales 0 0 Expenses Selling expenses 0 Total selling expenses General and administrative expenses Total general and administrative expenses 0 Total expenses 0 S 0 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. (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 0 Net sales 0 0 Expenses Selling expenses 0 Total selling expenses General and administrative expenses Total general and administrative expenses 0 Total expenses 0 S 0