Adria Lopez created Success Systems on October 1, 2013. 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, 2013. Adria Lopez 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
101	Cash	$	48,492
106.1	Alexs Engineering Co.		0
106.2	Wildcat Services		0
106.3	Easy Leasing		0
106.4	IFM Co.		3,160
106.5	Liu Corp.		0
106.6	Gomez Co.		2,738
106.7	Delta Co.		0
106.8	KC, Inc.		0
106.9	Dream, Inc.		0
119	Merchandise inventory		0
126	Computer supplies		580
128	Prepaid insurance		2,097
131	Prepaid rent		835
163	Office equipment		8,080
164	Accumulated depreciationOffice equipment			$	300
167	Computer equipment		20,800
168	Accumulated depreciationComputer equipment				1,120
201	Accounts payable				1,230
210	Wages payable			$	860
236	Unearned computer services revenue				1,380
301	S. Rey, Capital				81,892
302	S. Rey, Withdrawals	$	0
403	Computer services revenue				0
413	Sales				0
414	Sales returns and allowances		0
415	Sales discounts		0
502	Cost of goods sold		0
612	Depreciation expenseOffice equipment		0
613	Depreciation expenseComputer equipment		0
623	Wages expense		0
637	Insurance expense		0
640	Rent expense		0
652	Computer supplies expense		0
655	Advertising expense		0
676	Mileage expense		0
677	Miscellaneous expenses		0
684	Repairs expenseComputer		0

In response to requests from customers, A. Lopez 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 companys new merchandising activities. Also, Success Systems does not use reversing entries and, therefore, all revenue and expense accounts have zero beginning balances as of January 1, 2014. Its transactions for January through March follow:

Jan.

4

The company paid cash to Lyn Addie for five days work at the rate of $215 per day. Four of the five days relate to wages payable that were accrued in the prior year.

5

Adria Lopez invested an additional $23,100 cash in the company.

7

The company purchased $7,400 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.

9

The company received $2,738 cash from Gomez Co. as full payment on its account.

11

The company completed a five-day project for Alexs Engineering Co. and billed it $5,370, which is the total price of $6,750 less the advance payment of $1,380.

13

The company sold merchandise with a retail value of $4,100 and a cost of $3,460 to Liu Corp., invoice dated January 13.

15

The company paid $640 cash for freight charges on the merchandise purchased on January 7.

16

The company received $4,080 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

Liu Corp. returned $700 of defective merchandise from its invoice dated January 13. The returned merchandise, which had a $250 cost, is discarded. (The policy of Success Systems is to leave the cost of defective products in cost of goods sold.)

22

The company received the balance due from Liu Corp., net of both the discount and the credit for the returned merchandise.

24

The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases. The defective merchandise invoice cost, net of the discount, was $476.

26

The company purchased $9,200 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 $4,520 cost for $5,950 on credit to KC, Inc., invoice dated January 26.

29

The company received a $476 credit memorandum from Kansas Corp. concerning the merchandise returned on January 24.

31

The company paid cash to Lyn Addie for 10 days work at $215 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 $476 amount in the credit memorandum.

5

The company paid $550 cash to the local newspaper for an advertising insert in todays paper.

11

The company received the balance due from Alexs Engineering Co. for fees billed on January 11.

15

Adria Lopez withdrew $4,640 cash from the company for personal use.

23

The company sold merchandise with a $2,620 cost for $3,380 on credit to Delta Co., invoice dated February 23.

26

The company paid cash to Lyn Addie for eight days work at $215 per day.

27

The company reimbursed Adria Lopez for business automobile mileage (900 miles at $0.12 per mile).

Mar.

8

The company purchased $2,900 of computer supplies from Harris Office Products on credit, invoice dated March 8.

9

The company received the balance due from Delta Co. for merchandise sold on February 23.

11

The company paid $940 cash for minor repairs to the companys computer.

16

The company received $5,400 cash from Dream, Inc., for computing services provided.

19

The company paid the full amount due to Harris Office Products, consisting of amounts created on December 15 (of $1,230) and March 8.

24

The company billed Easy Leasing for $9,047 of computing services provided.

25

The company sold merchandise with a $2,172 cost for $2,800 on credit to Wildcat Services, invoice dated March 25.

30

The company sold merchandise with a $1,228 cost for $2,330 on credit to IFM Company, invoice dated March 30.

31

The company reimbursed Adria Lopez for business automobile mileage (400 miles at $0.12 per mile).

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 $2,135.
b.	Three more months have expired since the company purchased its annual insurance policy at a $2,796 cost for 12 months of coverage.
c.	Lyn Addie has not been paid for seven days of work at the rate of $215 per day.
d.	Three months have passed since any prepaid rent has been transferred to expense. The monthly rent expense is $835.
e.	Depreciation on the computer equipment for January 1 through March 31 is $1,120.
f.	Depreciation on the office equipment for January 1 through March 31 is $300.
g.	The March 31 amount of merchandise inventory still available totals $604. 1. Record the company paid cash to Lyn Addie for five days work at the rate of $215 per day. Four of the five days relate to wages payable that were accrued in the prior year. 2. Record the Adria Lopez invested an additional $23,100 cash in the company. 3. Record the company purchased $7,400 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 4. Record the company received $2,738 cash from Gomez Co. as full payment on its account. 5. Record the company completed a five-day project for Alexs Engineering Co. and billed it $5,370, which is the total price of $6,750 less the advance payment of $1,380. 6. Record the company sold merchandise with a retail value of $4,100 and a cost of $3,460 to Liu Corp., invoice dated January 13. 7. Record the cost of January 13 sale. 8. Record the company paid $640 cash for freight charges on the merchandise purchased on January 7. 9. Record the company received $4,080 cash from Delta Co. for computer services provided. 10. Record the company paid Kansas Corp. for the invoice dated January 7, net of the discount. 11. Record the Liu Corp. returned $700 of defective merchandise from its invoice dated January 13. The returned merchandise, which had a $250 cost, is discarded. (The policy of Success Systems is to leave the cost of defective products in cost of goods sold.) 12. Record the company received the balance due from Liu Corp., net of both the discount and the credit for the returned merchandise. 13. Record the company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases. The defective merchandise invoice cost, net of the discount, was $476. 14. Record the company purchased $9,200 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26. 15. Record the company sold merchandise with a $4,520 cost for $5,950 on credit to KC, Inc., invoice dated January 26. 16. Record the cost of January 26 sale. 17. Record the company received a $476 credit memorandum from Kansas Corp. concerning the merchandise returned on January 24. 18. Record the company paid cash to Lyn Addie for 10 days work at $215 per day. 19. Record the company paid $2,505 cash to Hillside Mall for another three months rent in advance. 20. Record the company paid Kansas Corp. for the balance due, net of the cash discount, less the $476 amount in the credit memorandum. 21. Record the company paid $550 cash to the local newspaper for an advertising insert in todays paper. 22. Record the company received the balance due from Alexs Engineering Co. for fees billed on January 11. 23. Record the Adria Lopez withdrew $4,640 cash from the company for personal use. 24. Record the company sold merchandise with a $2,620 cost for $3,380 on credit to Delta Co., invoice dated February 23. 25. Record the cost of February 23 sale. 26. Record the company paid cash to Lyn Addie for eight days work at $215 per day. 27. Record the company reimbursed Adria Lopez for business automobile mileage (900 miles at $0.12 per mile). 28. Record the company purchased $2,900 of computer supplies from Harris Office Products on credit, invoice dated March 8. 29. Record the company received the balance due from Delta Co. for merchandise sold on February 23. 30. Record the company paid $940 cash for minor repairs to the companys computer. 31. Record the company received $5,400 cash from Dream, Inc., for computing services provided. 32. Record the company paid the full amount due to Harris Office Products, consisting of amounts created on December 15 (of $1,230) and March 8. 33. Record the company billed Easy Leasing for $9,047 of computing services provided. 34. Record the company sold merchandise with a $2,172 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. 35. Record the cost of March 25 sale. 36. Record the company sold merchandise with a $1,228 cost for $2,330 on credit to IFM Company, invoice dated March 30. 37. Record the cost of March 30 sale. 38. Record the company reimbursed Adria Lopez for business automobile mileage (400 miles at $0.12 per mile).