On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the companys first set of financial statements on December 31, 2019. After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows.
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| The following additional facts are collected for use in making adjusting entries prior to preparingfinancial statements for the companys first three months. |
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The December 31 inventory count of computer supplies shows $590 still available.
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Three months have expired since the 12-month insurance premium was paid in advance.
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As of December 31, Lyn Addie has not been paid for four days of work at $115 per day.
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The computer system, acquired on October 1, is expected to have a four-year life with no
salvage value.
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The office equipment, acquired on October 1, is expected to have a five-year life with no
salvage value.
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Three of the four months' prepaid rent have expired.
Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger.
No. Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Uneared computer services revenue 307 Common stock 318 Retained earrings 319 Dividends 403 Computer Services revenue 612 Depreciation expense-Office equipment Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals Debit Credit $ 38,364 12,718 2,645 1,860 3,080 8.900 $ 21,600 0 0 0 0 67,000 0 6,300 33,914 0 0 2,150 0 0 0 1668 654 230 745 $100,914 $100.914 Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $930 cash to Hillside Mall for Business Solutions' share of mail advertising costs. 3 Paid $450 cash for minor repairs to the company's computer. 4 Received $4,350 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' bid of $7,500 on a proposed project has been accepted. Alex's paid a $1.600 cash advance to Business Solutions. 15 Purchased $1,900 of computer supplies on credit from Harris Office Products 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 $6.225 cash. 22-26 Took the week off for the holidays. 28 Received $3,400 cash from Gomez Co. onts receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.30 per mile) 31 The company paid $1,100 cash individends. 16 Requirement 2-5 and 7-post Transactions to General Ledger 101: Cash Debit Credit Balance 106: Accounts Receivable Date Debit Credit Balance Date 126: Computer Supplies Date Debit Credit Balance 128: Prepaid Insurance Date Debit Credit Balance 131: Prepaid Rent Debit Credit Balance 163: Office Equipment Date Debit Credit Balance Date 164: Accumulated Depreciation- Office Equipment Date Debit Credit Balance 167: Computer Equipment Date Debit Credit Balance 168: Accumulated Depreciation Computer Equipment Date Debit Credit Balance 201: Accounts Payable Date Debit Credit Balance 612: Depreciation Expense-Office Equipment Date Debit Credit Balance 613: Depreciation Expense-Computer Equipment Date Debit Credit Balance 210: Wages Payable 236: Unearned Computer Services Revenue Date Debit Credit Balance Date Debit Credit Balance 623: Wages Expense Date Debit Credit Balance 637: Insurance Expense Date Debit Credit Balance 307: Common Stock Debit Credit Balance 318: Retained Earnings Date Debit Credit Balance Date 640: Rent Expense Debit Credit Balance 652: Computer Supplies Expense Date Debit Credit Balance Date 319: Dividends Debit Credit Balance 403: Computer Services Revenue Date Debit Credit Balance Date 655: Advertising Expense Date Debit Credit Balance 676: Mileage Expense Date Debit Credit Balance 677: Miscellaneous Expense Date Debit Credit Balance 684: Repairs Expense-Computer Date Debit Credit Balance 901: Income Summary Date Debit Credit Balance
