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On October 1, 2020, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development.
On October 1, 2020, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The companys initial chart of accounts follows:
Account | No. | Account | No. | |
Cash | 101 | Common Stock | 307 | |
Accounts Receivable | 106 | Dividends | 319 | |
Computer Supplies | 126 | Computer Services Revenue | 403 | |
Prepaid Insurance | 128 | Wages Expense | 623 | |
Prepaid Rent | 131 | Advertising Expense | 655 | |
Office Equipment | 163 | Mileage Expense | 676 | |
Computer Equipment | 167 | Miscellaneous Expenses | 677 | |
Accounts Payable | 201 | Repairs ExpenseComputer | 684 | |
Oct. | 1 | S. Rey invested $51,000 cash, a $21,000 computer system, and $8,000 of office equipment in the company in exchange for common stock. | ||
2 | The company paid $3,280 cash for four months' rent. Hint: Debit Prepaid Rent for $3,280. | |||
3 | The company purchased $1,410 of computer supplies on credit from Harris Office Products. | |||
5 | The company paid $1,920 cash for one year's premium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $1,920. | |||
6 | The company billed Easy Leasing $5,500 for services performed in installing a new Web server. | |||
8 | The company paid $1,410 cash for the computer supplies purchased from Harris Office Products on October 3. | |||
10 | The company hired Lyn Addie as a part-time assistant. | |||
12 | The company billed Easy Leasing another $1,500 for services performed. | |||
15 | The company received $5,500 cash from Easy Leasing as partial payment on its account. | |||
17 | The company paid $765 cash to repair computer equipment that was damaged when moving it. | |||
20 | The company paid $1,708 cash for advertisements. | |||
22 | The company received $1,500 cash from Easy Leasing on its account. | |||
28 | The company billed IFM Company $5,808 for services performed. | |||
31 | The company paid $770 cash for Lyn Addies wages for seven days' work. | |||
31 | The company paid a $3,600 cash dividend. | |||
Nov. | 1 | The company paid $300 cash for mileage expenses. | ||
2 | The company received $5,633 cash from Liu Corporation for computer services performed. | |||
5 | The company purchased computer supplies for $1,090 cash from Harris Office Products. | |||
8 | The company billed Gomez Co. $5,768 for services performed. | |||
13 | The company agreed to perform future services for Alexs Engineering Co. No work has yet been performed. | |||
18 | The company received $3,608 cash from IFM Company as partial payment of the October 28 bill. | |||
22 | The company paid $210 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $210. | |||
24 | The company completed work and sent a bill for $4,450 to Alexs Engineering Co. | |||
25 | The company sent another bill to IFM Company for the past-due amount of $2,200. | |||
28 | The company paid $360 cash for mileage expenses. | |||
30 | The company paid $1,540 cash for Lyn Addie's wages for 14 days' work. | |||
30 | The company paid a $1,100 cash dividend. |
Required: a. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them. b. Prepare a trial balance as of the end of November.
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