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. Account Title Debit Credit Number 101 Cash $ 38,264 106 12,618 2,545 Accounts receivable 126 Computer supplies 128 Prepaid insurance Prepaid rent 2,220 131 3,300 163 Office equipment 8,000 164 Accumulated depreciation-Office equipment $0 167 Computer equipment 20,000 168 Accumulated depreciation-Computer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 307 Common stock 73,000 0 318 Retained earnings 319 Dividends 5,600 403 Computer services revenue 25,659 612 Depreciation expense-Office equipment 0 0 613 Depreciation expense-Computer equipment Wages expense 623 2,625 637 Insurance expense 0 640 Rent expense 0 652 Computer supplies expense 0 655 Advertising expense 1,728 704 676 Mileage expense 677 Miscellaneous expenses 250 684 Repairs expense-Computer 805 901 0 Income summary Totals. $ 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. Completed a project for Liu Corporation and received $5,625 cash. December 20 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. 101: Cash Date December 01 Date December 01 Date December 01 Debit Credit 126: Computer Supplies Debit Credit 131: Prepaid Rent Debit Credit 164: Accumulated Depreciation Office Equipment Date Debit Credit December 01 Date December 01 Date 2,545 December 01 Date 3,300 December 01 Date December 01 Balance 38,264 Balance Balance Balance 0 106: Accounts Receivable Debit Credit 128: Prepaid Insurance Debit Credit 163: Office Equipment Debit Credit 167: Computer Equipment Debit Credit Balance 12,618 Balance 2,220 Balance 8,000 Balance 20,000 168: Accumulated Depreciation Computer Equipment Date Debit Credit Balance December 01 210: Wages Payable Debit Date Balance December 01 307: Common Stock Debit Date Balance December 01 319: Dividends Date Debit Credit December 01 612: Depreciation Expense-Office Equipment Date Debit Credit December 01 Credit Credit Balance 0 Balance Date 0 December 01 Date 73,000 December 01 Date 5,600 December 01 201: Accounts Payable Debit Credit 236: Unearned Computer Services Revenue Debit Credit 318: Retained Earnings Debit Credit 403: Computer Services Revenue Debit Credit 613: Depreciation Expense-Computer Equipment Date Debit Credit December 01 0 Date December 01 Balance Balance Balance Balance 0 Balance 0 25,659 Date December 01 Date December 01 Date December 01 Date December 01 623: Wages Expense Debit 640: Rent Expense Debit Credit 655: Advertising Expense Debit Credit 677: Miscellaneous Expense Debit Credit Credit Balance Date December 01 Date 0 December 01 Date December 01 Date December 01 2,625 Balance Balance 1,728 Balance 250 637: Insurance Expense Debit Credit 652: Computer Supplies Expense Debit Credit 676: Mileage Expense Debit Credit 684: Repairs Expense-Computer Debit Credit Balance 0 Balance 0 Balance Balance 704 805 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 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 Retained earnings, December 31, 2021 $ 0 0 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Prepare a classified balance sheet as of December 31, 2021. BUSINESS SOLUTIONS Balance Sheet December 31, 2021 Assets Current assets Plant assets Liabilities Equity Total equity Total liabilities and equity $ $ Required 6 Required 7 Required 8 0 0 0 0 0 0 0 0 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 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 General Journal December 31 Clear entry Record entry Debit Required 6 Required 7 > Credit View general journal Required 8 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Record the necessary closing entries as of December 31, 2021. View transaction list Journal entry worksheet Credit View general journal 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 Income summary account. Note: Enter debits before credits. Date General Journal December 31 Clear entry Record entry Debit Credit View general journal Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Required 6 Record the necessary closing entries as of December 31, 2021. View transaction list Journal entry worksheet