Question
After the success of the company's first two months Santana Rey continues to operate Business Solutions. (Transactions for the first two months are described in
After the success of the company's first two months Santana Rey continues to operate Business Solutions. (Transactions for the first two months are described in Chapter 2 serial problem.) Business 1.) November 30, 2021, unadjusted trial balance of Business SolutionsJons (reflecting its transactions for October November 30, 2021,follows.
Unadjusted Trial Balance | ||
Account | Debit | Credit |
101 Cash | $38,264 | |
106 Accounts receivable | 12,618 | |
126 Computer supplies | 2,545 | |
128 Prepaid insurance | 2,220 | |
131 Prepaid rent | 3,300 | |
163 Office equipment | 8,000 | |
164 Accumulated depletion-Office equipment | 20,000 | |
167 Computer equipment | 0 | |
168 Accumulated Depletion-Computer equipment | 0 | |
201 Accounts payable | 0 | |
210 Wages payable | 0 | |
236 Unearned computer services revenue | 0 | |
307 Common stock | 73,000 | |
318 Retained earnings | 0 | |
319 Dividends | 5,600 | |
403 Computer services revenue | 25,659 | |
613 Depreciation expense- Office equipment | 0 | |
623 Wages expense | 2,625 | |
637 Insurance expense | 0 | |
640 Rent expense | 0 | |
652 Computer supplies expense | 0 | |
655 Advertising expense | 1,728 | |
676 Mileage expense | 704 | |
677 Miscellaneous expenses | 250 | |
684 Repairs expense- Computer | 805 | |
901 Income summary | 0 | |
Total | $98,659 | $988,659 |
Business Solutions had the following transactions and events in December 2021.
Dec 2. Paid $1,025 cash to Hillside Mall for Business Solution's share of mall advertising costs.
3. Paid $500 cash for minor repairs to the companys computer.
4.Received $3,950 cash from Ale's Engineering Co. for the receiv the receivable from November.
10. Paid cash to Lyn Addie for six days of work at the rate of $125 per day.
14.Notified by Alex's Engineering Co. that Business Solutions bid of $7,000 on a proposed projecthas been accepted. Alex's paid a $1,500 cash advance to Business Solutions.
15. Purchased $1,100 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 $5,625 cash.
22-26. Took the week off for the holiday.
28. Received $3,000 cash from Gomez Co. on its receivable.
29. Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile).
31. Paid $1,500 cash for dividends.
The following additional facts are collected for use in making adjustir ing entriesprior 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 salvagevalue.
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.
1. Prepare journal entries to record each of the December transactions. 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, 2021.
4. Prepare an income statement for the three months ended December 31, 2021.
5. Prepare an income statement for the three months ended December 31, 2021.
6. Prepare a classified balance sheet as of December 31,2021.
7. Record and post the necessary closing entries as of December 31, 2021.
8. Prepare a post-closing trial balance as of December 31.2021.
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