Part 1

John Wick, a skilled software developer and technology enthusiast, founded his own software consulting firm, TechSolutions, after gaining expertise through years of working in the tech industry. In Dec 2020, he undertook various business transactions. Below are the tasks related to these transactions:

Dec 1: Purchased a computer priced at $60,000 in cash.

Dec 1: Prepaid $12,000 in cash for next 12 months' business insurance in advance.

Dec 2: Made credit purchases of office furniture for $30,000 and office supplies for $3,000.

Dec 6: Completed a data system analysis report for a client and received $12,000 in cash.

Dec 9: Completed a $20,000 website development project for a client, who will pay within 45 days.

Dec 10: Paid the full amount of the account payable created on Dec 2.

Dec 19: Received $9,000 in cash from the client for website development, which will be completed and delivered next month. Dec 22: Received $15,000 as partial payment for the work completed on Dec 9.

Dec 25: Designed a database system for a client and recorded $7,500 on credit.

Dec 30: Paid Dec salaries totaling $40,000.

Dec 30: Withdrew $8,000 in cash from the business for a vacation in July.

Dec 30: Purchased $2,000 of additional office supplies on credit.

Dec 30: Paid $1,600 for the month's rent, $300 for the utility's bills, $200 internet net and $300 cell phone bill.

a. Prepare journal entries to record the transactions.

b. Posting to T-Accounts.

c. Prepare Unadjusted Trial Balance.

Part 2

Use the following information to prepare any adjusting entries required:

1. The examination of an insurance policy revealed that month insurance had expired.

2. One months' worth of property maintenance expenses, totaling $350, have accrued and has not been recorded.

3. An office supplies check revealed that there were $2,500 worth of unused supplies on hand.

4. Need to record the depreciation expense for the computer, which will be used for 3 years with zero salvage value.

5. Need to estimate depreciation expense for the furniture, which will be used for 5 years with $1,000 salvage value.

6. A website development project was completed, and this $3,000 invoice should have been recorded and charge to the client's account.

a. Prepare adjusted trial balance.

b. Prepare an income statement for the year ended December 31, 2020.

c. Prepare a statement of changes in equity for the year ended December 31, 2020.

d. Prepare a balance sheet statement for the year ended December 31, 2020

e. Prepare closing entry.