After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2021, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2021) follows. Debit $ 38,264 Credit 12,618 2,545 2,220 3,300 8,000 0 20,000 Number Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 613 Depreciation expense-Office equipment Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 655 676 677 684 901 Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary Totals 0000 73,000 0 5,600 25,659 0 0 2,625 0 0 0 1,728 704 250 805 0 $ 98,659 $ 98,659 Business Solutions had the following transactions and events in December 2021. December 2 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $500 cash for minor repairs to the company's computer. December 4 Received $3,950 cash from Alex's Engineering Company for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $125 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Business Solutions. December 15 Purchased $1,100 of computer supplies on credit from Harris Office Products. December 16 Sent a reminder to Gomez Company to pay the fee for services recorded on November 8. December 20 Completed a project for Liu Corporation and received $5,625 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,000 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). December 31 Paid $1,500 cash for dividends. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months. a. The December 31 inventory count of computer supplies shows $580 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 $125 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 have expired. Required: 1. Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2021. 4. Prepare an income statement for the three months ended December 31, 2021. 5. Prepare a statement of retained earnings for the three months ended December 31, 2021. 6. Prepare a classified balance sheet as of December 31, 2021. 7. Record the necessary closing entries as of December 31, 2021. 8. Prepare a post-closing trial balance as of December 31, 2021. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger. Note: If no entry is required for a transaction or event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 2 4 5 6 7 8 00 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. Note: Enter debits before credits. 11 Date December 02 General Journal Debit Credit Advertising expense 1,025 Cash 1,025 Record entry Clear entry View general journal Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare adjusting entries to reflect a through f. Note: If no entry is required for a transaction or event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 LO 5 6 The December 31 inventory count of computer supplies shows $580 still available. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Computer supplies expense 520 Accounts payable 1,100 Record entry Clear entry View general journal > Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Prepare an adjusted trial balance as of December 31, 2021. BUSINESS SOLUTIONS Required 7 Cash Accounts receivable Adjusted Trial Balance December 31, 2021 Account Title Debit Credit Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Required 8 Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals $ 0 EA 0 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare an income statement for the three months ended December 31, 2021. BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2021 Revenue Expenses Total expenses 0 $ 0 < Required 3 Required 5 > Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Prepare a statement of retained earnings for the three months ended December 31, 2021. BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended December 31, 2021 Retained earnings, October 1, 2021 0 Retained earnings, December 31, 2021 $ 0 < Required 4 Required 6 > Current assets Plant assets Total equity Total liabilities and equity December 31, 2021 Assets 0 0 0 0 0 Liabilities 0 Equity 0 $ 0 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Record the necessary closing entries as of December 31, 2021. View transaction list Journal entry worksheet 1 2 3 4 Record the entry to close the revenue account(s). Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal > Required 1 Required 2A Required 2B Required 3 Required 4 Prepare a post-closing trial balance as of December 31, 2021. BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2021 Required 5 Required 6 Required 7 Required 8 Debit Credit Totals 0 < Required 7 Required 8 0