After the success of the companys first two months, Adria Lopez continues to operate Success Systems. The November 30, 2013, unadjusted trial balance of Success
After the success of the companys first two months, Adria Lopez continues to operate Success Systems. The November 30, 2013, unadjusted trial balance of Success Systems (reflecting its transactions for October and November of 2013) follows.
No. Account Title Debit Credit 101 Cash $ 38,264 106 Accounts receivable 12,918 126 Computer supplies 2,545 128 Prepaid insurance 2,040 131 Prepaid rent 2,980 163 Office equipment 8,800 164 Accumulated depreciationOffice equipment $ 0 167 Computer equipment 20,400 168 Accumulated depreciationComputer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 301 A. Lopez, Capital 67,000 302 A. Lopez, Withdrawals 5,900 403 Computer services revenue 32,404 612 Depreciation expenseOffice equipment 0 613 Depreciation expenseComputer equipment 0 623 Wages expense 2,250 637 Insurance expense 0 640 Rent expense 0 652 Computer supplies expense 0 655 Advertising expense 1,678 676 Mileage expense 644 677 Miscellaneous expenses 230 684 Repairs expenseComputer 755 Totals $ 99,404 $ 99,404
Success Systems had the following transactions and events in December 2013.
Dec. 2 Paid $990 cash to Hillside Mall for Success Systems' share of mall advertising costs. 3 Paid $450 cash for minor repairs to the company's computer. 4 Received $4,950 cash from Alexs Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $105 per day. 14 Notified by Alex's Engineering Co. that Success Systems' bid of $7,700 on a proposed project has been accepted. Alexs paid a $2,000 cash advance to Success Systems. 15 Purchased $1,500 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 $5,775 cash. 2226 Took the week off for the holidays. 28 Received $3,000 cash from Gomez Co. on its receivable. 29 Reimbursed A. Lopez for business automobile mileage (400 miles at $0.26 per mile). 31 A. Lopez withdrew $1,200 cash from the company for personal use.
The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months:
a. The December 31 inventory count of computer supplies shows $610 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 $105 per day. d. The company's computer is expected to have a four-year life with no salvage value. e. The office equipment is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent has expired.
Required: 1.
Prepare journal entries to record each of the December transactions and events for Success Systems. (If no entry is required for a particular transaction, select "No journal entry required" in the first
1. Paid $990 cash to Hillside Mall for Success Systems' share of mall advertising costs. 2. Paid $450 cash for minor repairs to the companys computer. 3. Received $4,950 cash from Alexs Engineering Co. for the receivable from November. 4. Paid cash to Lyn Addie for six days of work at the rate of $105 per day. 5. Notified by Alex's Engineering Co. that Success Systems' bid of $7,700 on a proposed project has been accepted. Alexs paid a $2,000 cash advance to Success Systems. 6. Purchased $1,500 of computer supplies on credit from Harris Office Products. 7. Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 8. Completed a project for Liu Corporation and received $5,775 cash. 9. Received $3,000 cash from Gomez Co. on its receivable. 10. Reimbursed A. Lopez for business automobile mileage (400 miles at $0.26 per mile). 11. A. Lopez withdrew $1,200 cash from the company for personal use.
2.1 Prepare adjusting entries to reflect a through f
1. The December 31 inventory count of computer supplies shows $610 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 $105 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 has expired.
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