Question
Each student is required to answer all the following questions. Question 1. Describe the link between the income statement, the statement of owner's equity, and
Each student is required to answer all the following questions.
Question 1. Describe the link between the income statement, the statement of owner's equity, and the balance sheet.
Questions 2. Following the completion of the first two months of D&H Solutions, Danial Hemmings keeps running the business. The November 30, 2019, unadjusted trial balance of D&H Solutions (reflecting its transactions for October and November of 2019) follows.
No. | Account Title | Debit | Credit |
101 | Cash | $15,000 |
|
106 | Accounts receivable | 12,882 |
|
126 | Computer supplies | 2,545 |
|
128 | Prepaid insurance | 3,220 |
|
131 | Prepaid rent | 3,300 |
|
163 | Office equipment | 10,000 |
|
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 |
301 | D. Hemmings, Capital |
| 53,000 |
302 | D. Hemmings, Withdrawals | 5,600 |
|
403 | Computer services revenue |
| 25,659 |
612 | Depreciation expense Office equipment | 0 |
|
613 | Depreciation expense Computer 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 |
|
| Totals | $78,659 | $78,659 |
D&H Solutions had the following transactions and events in December 2019.
Dec | 2 | Paid $ 2510 cash to Sport Directs for D&H Solutions share of mall advertising costs. |
| 3 | Paid $725 cash for minor repairs to the companys computer. |
| 4 | Received $ 1025 cash from Morrison Co. for the receivable from November. |
| 10 | Paid cash to Aziz Jaafar for six days of work at the rate of $210 per day. |
| 14 | Notified by Morrison Co. that D&H Solutions bid of $8,000 on a proposed project has been accepted. Morrisons paid a $ 2510 cash advance to D&H Solutions. |
| 15 | Purchased $ 2500 of computer supplies on credit from The Works Products. |
| 16 | Sent a reminder to New Look Co. to pay the fee for services recorded on November 8. |
| 20 | Completed a project for Edward Corporation and received $8105 cash. |
| 22-26 | Took the week off for the holidays. |
| 28 | Received $ 2500 cash from Gomez Co. on its receivable. |
| 29 | Reimbursed D. Hemmings for business automobile mileage ( 1000 miles at $0.20 per mile). |
| 31 | D. Hemmings withdrew $3510 cash from the company for personal use. |
The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months:
- The December 31 inventory count of computer supplies shows $325 still available.
- Three months have expired since the 10 -month insurance premium was paid in advance.
- As of December 31, Aziz Jaafar has not been paid for four days of work at $ 100 per day.
- The computer system, acquired on October 1, is expected to have a 10 -year life with no salvage value.
- The office equipment, acquired on October 1, is expected to have a 10-year life with no salvage value.
- Three of the 10 months prepaid rent has expired.
Required: (Please round your results to the nearest integer e.g. 456.42 ~ 456)
- Prepare journal entries to record each of the December transactions and events for D&H Solutions.
- Prepare adjusting entries to reflect a through f.
- Post those entries to the accounts in the ledger.
- Prepare an adjusted trial balance as of December 31, 2019.
- Prepare a balance sheet as of December 31, 2019.
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