a.b.

c.d.

Required information [The following information applies to the questions displayed below.] Santana Rey created Business Solutions on October 1, 2020. The company has been successful, and its IIst of customers has grown. To accommodate the growth, the accounting system is modlfied 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, 2020. Santana Rey decided to add a fourth diglt with a decimal polnt to the 106 account number that had been used for the single Accounts Recelvable account. This change allows the company to continue using the existing chart of accounts. a company will extend credit avallable 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. 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 avallable on consulting fees. Addittonal 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. January 4 The company paid cash to Lyn Addie for five days" work at the rate of $185 per day. Four of the five days relate to wages payable that were accrued in the prior year. January 5 Santana Rey invested an additiona1 $23,000 cash in the company in exchange for more cormon stock. January 7 The company purchased $7,300 of merchandise fron Kansas Corporation with terns of 1/10, n/39, Foe shipping point, invoice dated January 7. January 9 The conpany received $2,798 cash from Gonez Company as fu11 payment on its account. January 11 The conpany completed a five-day project for Alex's Engineering Company and billed it $5,439, which is the total price of $6,840 less the advance payment of $1,410. The conpany debited Unearned conputer Services Revenue for $1,416. January 13 The company sold merchandise with a retail value of $4,69 and a cost of $3,44 to Liu Corporation, invoice dated January 13. January 15 The conpany paid $679 cash for freight charges on the merchandise purchased on January 7. January 16 The conpany received $4,680 cash from Delta Company for computer services provided. January 17 The conpany paid Kansas Corporation for the invoice dated January 7 , net of the discount. January 20 The company gave a price reduction (allowance) of $709 to Liu corporation and credited Liu's accounts receivable for that amount. January 22 The company received the balance due fron Liu Corporation, net of the discount and the allowance. January 24 The company returned defective nerchandise to Kansas Corporation and accepted a credit against future purchases (debited accounts payable). The defective nerchandise involce cost, net of the discount, was $486. January 26 The company purchased $9,600 of merchandise fron Kansas Corporation with terns of 1/10, n/39, foe destination, invoice dated January 26. January 26 The conpany sold merchandise with a $4,640 cost for $5,950 on credit to KC, Incorporated, invoice dated January 26. January 31 The company paid cash to Lyn Addie for 10 days, work at $185 per day. February 1 The conpany paid $2,565 cash to Hiliside Mal1 for another three nonths' rent in advance. February 3 The company paid Kansas Corporation for the balance due, net of the cash discount, less the $486 credit from nerchandise returned on January 24. February 5 The company paid $410 cash to Facebook for an advertisenent to appear on February 5 only. February 11 The company received the balance due fron Alex's Engineering Company for fees billed on January 11. February 15 The conpany paid a $4,789 cash dividend. February 23 The company sold merchandise with a $2,529 cost for $3,359 on credit to Delta conpany, invoice dated February 23. February 26 The conpany paid cash to Lyn Addie for eight days' work at $185 per day. February 27 The conpany reimbursed Santana Rey $160 cash for business automobile nileage. The company recorded the reimbursentent as "Mileage Expense." March 8 The company purchased $2,750 of conputer supplies from Harris office Products on credit with terms of n/30, FOB destination, invoice dated March 8 . March 9 The company received the balance due fron Delta Company for nerchandise sold on February 23. March 11 The company paid $939 cash for minor repairs to the company's conputer. March 16 The company received $5,350 cash from Dream, Incorporated, for conputing services provided. March 19 The conpany paid the full ancunt due of $4,600 to Harris Office Products, consisting of anounts created on December 15 (of $1,250 ) and March 8. March 24 The company billed Easy Leasing for $9,167 of conputing services provided. March 25 The company sold merchandise with a $2, 902 cost for $2,859 on credit to Wildcat Services, invoice dated March 25. March 30 The company sold merchandise with a $1,108 cost for $2,360 on credit to IFM Company, Invoice dated March 30. March 31 The company reimbursed Santana Rey $128 cash for business automobile nileage. The company recorded the reimbursentent as "Mileage Expense." The following additlonal facts are avallable for preparing adjustments on March 31 prior to financlal statement preparatlon. a. The March 31 amount of computer supplies stlll avallable totals $2,095. b. Prepald Insurance coverage of $618 expired during this three-month period. c. Lyn Addle has not been pald for seven days of work at the rate of $185 per day. d. Prepald rent of $2,565 explred during this three-month perlod. e. Depreclation on the computer equipment for January 1 through March 31 is $1,220. f. Depreclation on the office equipment for January 1 through March 31 is $320. g. The March 31 amount of merchandise Imventory stlll avallable totals $504. 6. Prepare a classlfied balance sheet (from the adjusted trlal balance) as of March 31,2021. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ BUSINESS SOLUTIONS } \\ \hline \multicolumn{2}{|c|}{ Statement of Retained Eaming5 } \\ \hline For Three Months Ended March 31, 2021 \\ \hline Retained earnings, December 31, 2020 & \\ \hline & \\ \hline & \\ \hline & \\ \hline Retained earnings, March 31,2021 & $ \\ \hline \end{tabular} Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31,2021. (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. Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31,2021. (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