Part 4

The following additional facts are available for preparing Computer adjustments on March 31 prior to financial statement preparation:

1. The March 31 amount of computer supplies still available totals $2,005.
2. Three more months have expired since the company purchased its annual insurance policy at a $2,220 cost for 12 months of coverage.
3. Lyn Addie has not been paid for seven days of work at the rate of $125 per day.
4. Three months have passed since any prepaid rent has been transferred to expense. The monthly rent expense is $825.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,500.
6. Depreciation on the office equipment for January 1 through March 31 is $300.
7. The March 31 amount of merchandise inventory still available totals $204.

The purpose of part 4 is to prepare quarterly financial statements for Computer Solutions through March 31, 2020. These statements may be prepared using Excel or by hand. Follow the instructions below:

1. Before starting Part 4 you should ensure that your general ledger balances agree with the March 31, 2020 balances provided in this folder.
2. (2 points) Using the Unadjusted trial balance you prepared in part 3, prepare a partial work sheet in Excel consisting of the first seven columns that includes the unadjusted trial balance, the March 31 adjustments (a) through (g), and the adjusted trial balance. Use formulas where applicable. Do not prepare closing entries and do not journalize the adjustments or post them to the ledger.
3. (8 points) Prepare the following financial statements:
   1. Income statement for the three months ended March 31, 2020. Use a single-step format.
   2. Statement of retained earnings for the three months ended March 31, 2020.
   3. Classified balance sheet (from the adjusted trial balance) as of March 31, 2020.
   4. Statement of cash flows using the indirect method for the three months ended March 31, 2020. Owner Raymond Santana contributed $20,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,800 in cash dividends.

unadjusted TB	March 31, 2020
Account	Debit	Credit
Cash	69,602
A/R - Alexs Engineering Co.
A/R -Wildcat Services	2,800
A/R -West Leasing	9,045
A/R -IFM Co.	5,220
A/R -Liu Corp.
A/R -Gomez Co.
A/R -Delta Co.
A/R -KC, Inc.	5,800
A/R -Dream, Inc.
Merchandise inventory	176
Computer supplies	3,310
Prepaid insurance	1,665
Prepaid rent	3,300
Office equipment	6,000
Accumulated depreciationOffice equipment		300
Computer equipment	24,000
Accumulated depreciationComputer equipment		1,500
Accounts payable
Wages payable
Unearned computer services revenue
Common stock		100,000
Retained earnings		7,765
Dividends	4,800
Computer services revenue		25,305
Sales		19,240
Sales returns and allowances	500
Sales discounts	47
Cost of goods sold	13,590
Depreciation expenseOffice equipment
Depreciation expenseComputer equipment
Wages expense	2,375
Insurance expense
Rent expense
Computer supplies expense
Advertising expense	600
Mileage expense	320
Miscellaneous expenses
Repairs expenseComputer	960
Income Summary
Totals	154,110	154,110