After the success of the company's 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. Business Solutions had the following transactions and events in December 2020 . December 2 Paid $1,005 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $460 cash for minor repairs to the company's computer. December 4 Received $4,650 cash from Alex's Engineering Co. for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $115 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,100 on a proposed project has been accepted. Alex's paid a $2,400 cash advance to Business Solutions. December 15 Purchased $1,500 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 $6,525 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,700 cash from Gomez Company on its receivable. December 29 Reimbursed s. Rey for business automobile mileage ( 600 miles at $0.30 per mile). December 31 The company paid $1,300 cash in 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 $600 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 $115 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 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. the closing entries to the general ledger accounts. \begin{tabular}{|c||r|r|r|} \hline \multicolumn{1}{|c|}{} & \multicolumn{2}{c|}{ 131: Prepaid Rent } \\ \hline \multicolumn{1}{|c|}{ Date } & Debit & Credit & \multicolumn{1}{|c|}{ Balance } \\ \hline December 01 & & & 3,280 \\ \hline December 31 & & 2,460 & 820 \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline & \multicolumn{2}{c|}{ 307: Common Stock } \\ \hline Date & Debit & \\ \hline December 01 & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline & \multicolumn{2}{c}{ 318: Retained Earnings } \\ \hline Date & Debit & Credit \\ \hline December 01 & & \\ \hline December 31 & & \\ \hline December 31 & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline December 01 & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular}
Complete this question by entering your answers in the tabs below. Prepare an income statement for the three months ended December 31, 2020
