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. Credit Account Title Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation office equipment second Computer equipment Accumulated depreciation Computer equipment Debit $ 38,764 12,618 2,545 1,860 3,100 8,900 $ 23,200 Accounts payable wages payaona No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 30 319 403 *** 612 613 --- 623 637 640 652 655 676 677 684 67,000 6,000 35,519 payable Unearned computer services revenue Common stock Retained earnings Dividends eu Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages Insurance expense Dent Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals 2,325 Insus expense a 1,658 614 160 775 $102,519 $102,519 Business Solutions had the following transactions and events in December 2020. Dec. paid 2 Paid $930 cash to Hillside Mall for Business Solutions's share of mall advertising costs. 3 Paid $410 cash for minor repairs to the company's computer. 4 Received $4,650 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $115 per day. 14 Notified by Alex's Engineering co. that Business Solutions's bid of $7,400 on a proposed project has been accepted. Alex's a $2,300 cash advance to Business Solutions. 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. 22- Took the week off for the holidays. 26 28 Received $3,200 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.22 per mile). 31 The company paid $1,500 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 $590 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 7post 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. $ 42,044 BUSINESS SOLUTIONS Income Statement For The Three Month Ended December 31,2020 Revenue : Computer Service Revenue $ 42,044 Total Revenue Expense Mileage expense $ 724 Miscellaneous Expense $ 160 Insurance expense $ 465 Wages expense $ 3,475 Depreciation expense-Computer Equipment $ 1,450 Depreciation expense-Office Equipment $ 445 Repair expense - Computer $ 1,185 Rent Expense $ 2,325 Computer Supplies Expense $ 3,355 Advertising expense $ 2,588 Total Expense Net Income $ $ 16,172 25,872 Amount 59,327 8,455 BUSINESS SOLUTIONS Balancesheet December 31,2020 Assets Amount Current Asset Cash $ 51,799 Account Receivable $ 4,768 Computer Supplies $ 590 Prepaid Rent $ 775 Prepaid Insurance $ 1,395 Total Current asset $ Property,Plant, and Equipment Office Equipment $ 8,900 Less : Accumulated Depreciation - Office Equipm $ 445 Book Value- Office Equipment $ Computer Equipment $ 23,200 Less : Accumulated Depreciation - Computer Equi $ 1,450 Book Value - Computer Equipment $ Total Property,Plant, and Equipment $ Total Assets $ Liabilities Current Liabilities Accounts Payable $ 1,400 Wages Payable $ 460 Unearned Computer Service Revenue $ 2,300 Total Liabilities Equity Common Stock $ 67,000 Retained Earnings $ 18,372 Total Equity $ Total Liabilities and Equity $ 21,750 30,205 89,532 4,160 85,372 89,532 Based on your financial statements for Business Solutions answer the following questions: 1. Complete the accounting equation for Business Solutions using the amounts in this format: $ = $ + $ 2. In discussing Business Solutions latest financial statements, you as the manager say that it is the "the net income results on the bottom line that really count. What do you mean? Which financial statement are you referring to? Are the results reflected satisfactory? Explain your answers. 3. Does Business Solutions have enough cash to pay its liabilities on December 31, 2020? Please list the December 31 balance of cash, subtract the amount of total current liabilities and calculate the overage or shortfall cash amount. Does Business Solutions need to improve this situation? If your answer is that no improvement is needed, please describe what they are doing correctly. If your answer is yes improvement is needed, please provide a suggestion on how the company may improve