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Complete the accounting equation for Business Solutions using the dollar amounts in this format: $______ = $_______ + $_____________
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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.
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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,
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 Debit $ 38, 364 13,218 2,645 1,860 3,260 8,600 $ 0 21,600 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 Account Title Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals 0 0 0 0 63,000 0 6,600 38,789 0 0 2,475 0 0 0 1,688 614 150 715 $101,789 $101,789 Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid $935 cash to Hillside Mall for Business Solutions's share of mall advertising costs. 3 Paid $440 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 $7,800 on a proposed project has been accepted. Alex's paid a $2,200 cash advance to Business Solutions. 15 Purchased $1,800 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 $6,375 cash. 22- Took the week off for the holidays. 26 28 Received $3,100 cash from Gomez Co. on its receivable. 29 Reimbursed s. Rey for business automobile mileage (500 miles at $0.27 per mile). 31 The company paid $1,400 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. BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2020 Revenue Computer services revenue $ 45,164 $ 430 1,350 3,625 465 Expenses Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer 2,445 3,845 2,623 749 150 1,155 F Total expenses Net income 16,837 28,327 $ BUSINESS SOLUTIONS Balance Sheet December 31, 2020 Assets Cash $ 51,089 5,468 600 1,395 815 $ 8,600 8,170 Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue (430) 21,600 1,350 $ F 20,250 87,787 $ 1,800 460 2,200 4,460 Total Liabilities Equity Common stock Retained earnings 63,000 20,327 F Total equity Total Liabilities and Equity 83,327 87,787 $ Prepare a statement of retained earnings for the three months ended December 31, 2020. BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended December 31, 2020 Retained earnings, October 1, 2020 $ Add: Net income 0 28,327 28,327 Less: Dividends Retained earnings, December 31, 2020 8,000 20,327 $ F Prepare an adjusted trial balance as of December 31, 2020. BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2020 Account Title Debit Credit Cash $ 51,089 5,468 Accounts receivable 600 1,395 815 8,600 Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable $ 430 21,600 1,350 1,800 460 Wages payable Unearned computer services revenue 2,200 Common stock 63,000 Retained earnings 0 Dividends 8,000 45,164 Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment 430 1,350 Wages expense 3,625 Insurance expense 465 2,445 3,845 Rent expense Computer supplies expense Advertising expense Mileage expense 2,623 749 Miscellaneous expenses 150 Repairs expense-Computer Totals 1,155 114,404 $ $ 114,404 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. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Prepare adjusting entries to reflect a through f. No Transaction General Journal Debit Credit 1 a. 3,845 Computer supplies expense Computer supplies 3,845 2 b. 465 Insurance expense Prepaid insurance 465 3 C. 460 Wages expense Wages payable 460 4 d. 1,350 Depreciation expense-Computer equipment Accumulated depreciationComputer equipment 1,350 5 e. 430 Depreciation expense-Office equipment Accumulated depreciation Office equipment 430 6 f. Rent expense 2,445 Prepaid rent 2,445
