Question
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 | $ | 38,864 | |||
106 | Accounts receivable | 13,618 | ||||
126 | Computer supplies | 2,645 | ||||
128 | Prepaid insurance | 1,920 | ||||
131 | Prepaid rent | 3,240 | ||||
163 | Office equipment | 8,000 | ||||
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 | ||||
307 | Common stock | 68,000 | ||||
318 | Retained earnings | 0 | ||||
319 | Dividends | 6,300 | ||||
403 | Computer services revenue | 32,489 | ||||
612 | Depreciation expenseOffice equipment | 0 | ||||
613 | Depreciation expenseComputer equipment | 0 | ||||
623 | Wages expense | 2,175 | ||||
637 | Insurance expense | 0 | ||||
640 | Rent expense | 0 | ||||
652 | Computer supplies expense | 0 | ||||
655 | Advertising expense | 1,678 | ||||
676 | Mileage expense | 694 | ||||
677 | Miscellaneous expenses | 220 | ||||
684 | Repairs expenseComputer | 735 | ||||
Totals | $ | 100,489 | $ | 100,489 | ||
Success Systems had the following transactions and events in December 2013. |
Dec. | 2 | Paid $925 cash to Hillside Mall for Success Systems' share of mall advertising costs. |
3 | Paid $470 cash for minor repairs to the company's computer. | |
4 | Received $4,350 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 $100 per day. | |
14 | Notified by Alex's Engineering Co. that Success Systems' bid of $7,100 on a proposed project has been accepted. Alexs paid a $2,400 cash advance to Success Systems. | |
15 | Purchased $1,400 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 $6,525 cash. | |
2226 | Took the week off for the holidays. | |
28 | Received $3,300 cash from Gomez Co. on its receivable. | |
29 | Reimbursed A. Lopez for business automobile mileage (600 miles at $0.32 per mile). | |
31 | The business paid $1,100 cash for dividends. |
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 $660 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 $100 per day. |
d. | The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. |
e. | The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. |
f. | Three of the four months prepaid rent has expired. |
2.2 | Post the journal entries to record each of the December transactions and adjusting entries to the accounts in the ledger.
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