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On October 1, 2020, Aster Turane organized a computer service company called Aster Systems. Aster is organized as a sole proprietorship and will provide consulting
On October 1, 2020, Aster Turane organized a computer service company called Aster Systems. Aster is organized as a sole proprietorship and will provide consulting services, computer system installations, and custom program development. Aster Systems has adopted the calendar year for reporting, and expects to prepare the company's first set of financial statements as of December 31, 2020. The initial chart of accounts for the accounting system includes these items: Account Number 101 106 126 128 131 163 167 201 Account Name Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Computer Equipment Accounts Payable Account Number 301 302 403 623 655 676 684 699 Account Name Aster Turane, Capital Aster Turane, Withdrawals Computer Services Revenue Wages Expense Advertising Expense Mileage Expense Repairs Expense, Computer Charitable Donations Expense Part A Required 1. Set up balance column accounts based on the chart of accounts provided. 2. Prepare journal entries to record each of the following October transactions. 3. Post the October entries. 4. Prepare a trial balance at October 31, 2020. 5. Prepare an income statement and a statement of changes in equity for the month ended October 31, 2020, as well as a balance sheet at October 31, 2020. Oct. 1 Aster Turane invested $32,000 cash, a $5,040 computer system, and $12,000 of office equipment in the business. 2 Paid six months of rent in advance; $9,300. 3 Purchased computer supplies on credit for $1,975 from Triple-One Supplies. 5 Paid $8,640 cash for one year's premium on a property and liability insurance policy. 6 Billed Norton Electric $3,300 for installing a new computer system. 8 Paid for the computer supplies purchased from Triple-One Supplies. 10 Hired Donald Gee as a part-time assistant for $345 per day, as needed. 12 Billed Norton Electric another $1,850 for computer services rendered. 15 Received $1,650 from Norton Electric on its account. 17 Paid $375 to repair equipment damaged when moving into the new office. 20 Paid $1,950 for an advertisement in the local newspaper. 22 Received the balance owing from Norton Electric on its account. 28 Billed Whistler Resort $6,400 for services. 31 Paid Donald Gee for nine days' work. 31 Aster Turane withdrew $1,200 cash from the business for personal use. Part B Required 6. Prepare journal entries to record each of the following November transactions. 7. Post the November entries. 8. Prepare a trial balance at November 30, 2020. 9. Prepare an income statement and a statement of changes in equity for the two months ended November 30, 2020, as well as a balance sheet at Novembe 30, 2020. Nov. 1 Reimbursed Aster Turane's business automobile expense for 2,630 kilometres at $1.60 per kilometre. 2 Received $7,920 cash from Langara Lodge for computer services rendered. 5 Purchased $420 of computer supplies for cash from Triple-One Supplies 8 Billed Dinwoody Entertainment $4,230 for computer services rendered. 13 Notified by Kinsetta Groceries that Aster's bid of $5,950 for an upcoming project was accepted. 18 Received $4,200 from Whistler Resort against the bill dated October 28. 22 Donated $500 to the Hope Mission in the company's name. 24 Completed work for Kinsetta Groceries and sent a bill for the agreed amount. 25 Sent another bill to Whistler Resort for the past due amount of $2,200. 28 Reimbursed Aster Turane's business automobile expense for 1,080 kilometres at $1.60 per kilometre. 30 Paid Donald Gee for 17 days' work. 30 Aster Turane withdrew $1,400 cash from the business for personal use
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