ABC company Project:

Serial problems business solutions LO P1, P2, P3, P4, P5, P6

After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2020) follows.

NumberAccount TitleDebitCredit101Cash$ 38,764 106Accounts receivable13,018 126Computer supplies2,645 128Prepaid insurance1,920 131Prepaid rent2,980 163Office equipment8,700 164Accumulated depreciationOffice equipment $ 0167Computer equipment22,000 168Accumulated depreciationComputer equipment 0201Accounts payable 0210Wages payable 0236Unearned computer services revenue 0307Common stock 68,000318Retained earnings 0319Dividends5,600 403Computer services revenue 33,124612Depreciation expenseOffice equipment0 613Depreciation expenseComputer equipment0 623Wages expense2,200 637Insurance expense0 640Rent expense0 652Computer supplies expense0 655Advertising expense1,718 676Mileage expense664 677Miscellaneous expenses190 684Repairs expenseComputer725 Totals$ 101,124$ 101,124

Business Solutions had the following transactions and events in December 2020.

December 2Paid $955 cash to Hillside Mall for Business Solutions's share of mall advertising costs.December 3Paid $410 cash for minor repairs to the companys computer.December 4Received $4,750 cash from Alexs Engineering Co. for the receivable from November.December 10Paid cash to Lyn Addie for six days of work at the rate of $120 per day.December 14Notified by Alexs Engineering Company that Business Solutions's bid of $7,400 on a proposed project has been accepted. Alexs paid a $1,900 cash advance to Business Solutions.December 15Purchased $1,300 of computer supplies on credit from Harris Office Products.December 16Sent a reminder to Gomez Company to pay the fee for services recorded on November 8.December 20Completed a project for Liu Corporation and received $5,825 cash.December 22-26Took the week off for the holidays.December 28Received $3,100 cash from Gomez Company on its receivable.December 29Reimbursed S. Rey for business automobile mileage (500 miles at $0.30 per mile).December 31The company paid $1,000 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months.

1. The December 31 inventory count of computer supplies shows $640 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. 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.

2-a. Prepare adjusting entries to reflect a through f.

2-b. Post the journal entries to record each of the December transactions from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts.

3. Prepare an adjusted trial balance as of December 31, 2020.

4. Prepare an income statement for the three months ended December 31, 2020.

5. Prepare a statement of retained earnings for the three months ended December 31, 2020.

6. Prepare a balance sheet as of December 31, 2020.

7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B.

8. Prepare a post-closing trial balance as of December 31, 2020.

Full Accounting Cycle Problem (i Prepare adjusting entries to reflect a through f