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 follows. Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid S1,02j cach to Hillside Nall for Business Solutions's share of mall adrertising costs. 3 Paid $500 cash for minor repairs to the company's computer. 4 Receired 83.950 cash from Alex's Engineening Ca for the receirable from November. 10 Paid cash to Lma Addie for six dags of work at the rate of 125 per day. 14 . Votifed by Aler's Engineering Co that Business Solutions's bid of 57,000 on a proposed project has been accepted. Alex's paid a 31,500 cash adrynee to Business Solutions. 15 Purchased $1,100 of computer supplies on credit fom Haris Office Produes. 16 Senta reminder to Gomez Co. to pay the fee for serices reoorded on Norember 8, 20 Completed a project for Liu Corporation and received 556625 cash. 22-26 Took the week of for the holidays, 28 Receired $3,000 cash from Gomez Co. on its reeciriable 29 Reimbursed S. Rey for business automobile mileage (600 miles at 80.32 per mile). 31 The company paid $1,500 cash in dividends. The following additional facts are collected for use in making a djusting 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 arailable. b. Three months have expired since the 12-month insuranee premium vas paid in adrance. c. As of December 34 Lyn Addie has not been paid for four days of rork at $125 per day. d. The computer system, acquired on 0ctober 1, is expected to hare a four-year life with no salrage ralue. e. The oftre equipment, acquired on October 1 , is erpected to hare a freyyear ife vith no salrage ralue. f. Three of the four months' prepaid rent hare expired. Required 1. Prepare journal entries to record each of the December transactions and erents for Business Solutions. Post those entries to the accounts in the ledger. 2. Prepare adjusting entries to reflect a through f. Post those entries to the accounts in the ledger. 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 and post the necessary closing entries as of December 31,2020. 8. Prepare a post-closing trial balance as of December 31,2020. Check (3) Acjusted trial balance totas: 509034 (6) Total assets, 583,460 (B) Post-cosing tial oslance totas. $85.110 EXAMPLE FASTFORWARD Adjusted Trial Balance December 31, 2020 Acct. No. Account Title 101 Cash 106 Accounts receivable 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment. 201 Accounts payable 209 Salaries payable 236 Unearned consulting revenue 307 Common stock 318 Retained earnings - 319 Dividends Debit Credit $4,275 1,800 8,670 2,300 26,000 403 Consulting revenue 406 Rental revenue [ 612 Depreciation expense-Equipment 300 622 Salaries expense 1,610 637 Insurance expense 100 640 Rent expense 1,000 652 Supplles expense 1,050 L 690 Utilities expense 347.610305 Totals $47,610$47,610 7,850 300 $300 6,200 210 2,750 30,000 0 200 10 Step 2 Prepare statement of retained earnings Sten 3 Prenare halanre sheet LEDGER STYLE Business Solutions had the following transactions and erents in December 2020. Dec. 2 Paid S1,025 cash to Hillside Mall for Business Solutions's share of mall adrertising costs. 3 Paid S500 cash for minor repais to the company's compiter. 4 Received 83,950 cash from Alex's Engineering Co. for the revirable from Vovember. 10 Paid cash to Lyn Addie for six days of work at the rate of $125 per day. 14 Notifed by Alers Enginearing Co, that Business Solutions's bid of \$7,000 on a proposed project has been accepted. Aler's paid a S1,500 cash adrance to Business Solutions. 15 Purchased S1,100 of computer suppies on creit fom Haris Ofice Products. 20 Completed a project for Lin Corporation and received 85,625 cash. 22-26 Took the reek off for the holidars. 28 Reveived \$3,000 cash from Gomez Co. on its revirable. 29 Reimbursed S. Rey for bosiness automobile mieage (600 miles at $0.32 per mile). 31 The company peid 51,500 cash in dividends. The following additional facts are collected for use in making a djusting entries prior to preparing financial statements for the company's first three months. a. The December 31 inventory count of computer supplies shous $580 still arailable. b. Three months have expired since the 12 -month insuranee prenium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of rork at $125 per day. d. The computer system, acquired on Oetober 1, is expected to hare a four-year life with no salvage ralue. e. The office equipment, acquired on October 1 , is enpetted to hare a fre-year life with no salrage ralue. f. Three of the four month' prepaid rent have engired. Required 1. Prepare journal entries to record each of the December transactions and erents for Business Solutions. Post those entries to the accounts in the ledger. 2. Prepare adjusting entries to reflect a through f. Post those entries to the accounts in the ledger. 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 and post the necessary closing entries as of December 31,2020. 8. Prepare a post-closing trial balance as of December 31,2020. Check (3) Acjusted trial balance totas: 509034 (6) Total assets, 583,460 (B) Post-cosing tial oslance totas. $85.110