Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development.

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The company's initial chart of accounts follows. October 1 S. Rey invested $53,000 cash, a $30,000 computer system, and $9, ebe of office equipment in the company in exchange for comion s tock. October 2 The company paid $3,260 cash for four month' rent. Hint: Debit Prepaid Rent for $3,260. October 3 The company purchased $1,330 of computer supplies on credit fron Harris office Products. October 5 The company paid $2,040 cash for one year's prenium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $2,040. October 6 The company bitled Easy Leasing $5,700 for services performed in installing a new Web server. October 8 The company paid $1,33 cash for the computer supplies purchased from Harris office Products on october 3. October 10 The company hired Lyn Addie as a part-time assistant. october 12 The company billed Easy Leasing another $2,200 for serpices perforned. October 15 The company received $5,700 cash from Easy Leasing as partial payment on its account. October 17 The company paid $795 cash to repair computer equipment that was damaged when moving it. October 20 The company paid $1,703 cash for advertisements. October 22 The company received $2,200 cash from Easy Leasing on its account. October 28 The company billed IFM Conpany $5,468 for services performed. October 31 The company paid $910 cash for Lyn Addie's wages for seven days' work. October 31 The company paid a $2,700 cash dividend. November 1 The company paid $280 cash for mileage expenses. November 2 The company received $5,033 cash from Liu Corporation for computer services performed. Novenber 5 The company purchased cosputer supplies for $1, 085 cash from Harris office Products. November 8 The company billed Gomez Company $5,868 for services performed. November 13 The company agreed to perform future services for Alex's Engineering Company. No work has yet been performed. November 18 The company received $1,908 cash froh IFM Company as partial payment of the 0ctober28 bill. November 22 The company paid $170 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $170. November 24 The company completed work and sent a bill for $4,350 to Alex's Engineering Company. November 25 The company sent another bill to IFM Company for the past-due amount of $3,500. Novenber 28 The company paid $336 cash for nileage expenses. November 30 The company paid $1,820 cash for Lyn Addie's wages for 14 days' work. November 30 The company paid $1,820 cash for Lyn Addie's wages for 14 days' work. November 30 The company paid a $1,200 cash dividend. Required: 1. Prepare journal entries to record each of the above transactions for Business Solutions. 2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them. 3. Prepare a trial balance as of the end of November. Complete this question by entering your answers in the tabs below. After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2021, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2021) follows. Business Solutions had the following transactions and events in December 2021. December 2 Paid $965 cash to Hillside Mall for Business Solutions's share of mall advertising costs. Decenber 3 Paid $460 cash for minor repairs to the company's conputer. Decenber 4 Received $4,350 cash from Alex's Engineering Conpany for the receivable from November. December 10 Paid cash to Lyn Addie for 51x days of work at the rate of $105 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,200 on a proposed project has been accepted. Alex's paid a $1,800 cash advance to Business Solutions. December 15 Purchased $1,400 of computer supplies on credit from Harris office Products. December 16 Sent a reminder to Gomez Company to pay the fee for services recorded on November 8. December 20 Completed a project for Liu Corporation and received $5,875 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,100 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage ( 500 miles at $0.30 per mile). December 31 Paid $1,300 cash for 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. a. The December 31 inventory count of computer supplies shows $680 still available. b. Three months have expired since the 12 -month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $105 per day. d. The computer system, acquired on October 1 , is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1 , is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31,2021. 4. Prepare an income statement for the three months ended December 31, 2021. 5. Prepare a statement of retained earnings for the three months ended December 31, 2021. 6. Prepare a classified balance sheet as of December 31, 2021. 7. Record the necessary closing entries as of December 31, 2021. 8. Prepare a post-closing trial balance as of December 31, 2021. Complete this question by entering your answers in the tabs below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis International

Authors: Charles T. Horngren, Srikant M. Datar, George Foster

11th Edition

8120323548, 978-8120323544

More Books

Students also viewed these Accounting questions