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Debit [The following information applies to the questions displayed below) Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts No. Account Title Credit 101 Cash $48,552 106.1 Alex's Engineering Co. 106.2 Wildcat Services Easy Leasing 3,170 106.5 Liu Corp. 2,808 106.7 Delta Co. 106.8 KC, Inc. Merchandise inventory Computer supplies Prepaid insurance Prepaid rent Office equipment 106.3 106.4 IFM CO. 196.6 Gomez Co. e 106.9 Dream, Inc. 119 126 128 131 163 15 Asa dan art a 660 2,070 925 8, 110 2,808 660 2,070 925 8,110 $ 210 21,800 106.5 Liu Corp. 106.6 Gomez Co. 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 office equipment 164 Accumulated depreciation office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 Depreciation expense-office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 1,070 1,150 540 1,390 74,575 9,160 403 OOOOOOOOOOOO 4, 1,150 540 1,390 74,575 9,160 LU 201 210 236 307 318 319 403 413 414 415 502 612 613 623 637 640 652 655 676 677 684 Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Sales sales returns and allowances Sales discounts Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer @ e In response to requests from customers, S. Rey will begin selling computer software The company will extend credit terms of 1/10. n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow Jan. 4 The company paid cash to Lyn Addie for five days' work at the rate of $135 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24, 100 cash in the company in exchange for more common stock Jan. In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow 4 The company paid cash to Lyn Addie for five days work at the rate of $135 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,100 cash in the company in exchange for more common stock. 7 The company purchased $7,200 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,808 cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,480, which is the total price of $6,870 less the advance payment of $1,390. The company debited Unearned computer Services Revenue for $1,390. 13 The company sold merchandise with a retail value of $4,400 and a cost of $3,400 to Liu Corp., invoice dated January 13. 15 The company paid $719 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,030 cash from Delta Co. for computer services provided. 17 The company paid Kansas Corp. for the invoice dated January 7, net of the discount. 20 The company gave a price reduction (allowance) of $700 to Liu Corp., and credited Liu's accounts receivable for that amount 22 The company received the balance due from Liu Corp. net of the discount and the allowance. 24. The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise Invoice cost, net of the discount, was $486. 26 The company purchased $9,900 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination Invoice dated January 26. 26 The company sold merchandise with a $4,500 cost for $5,850 on credit to KC, Inc., Invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $135 per day. Feb. 1 The company paid $2,775 cash to Hillside Mall for another three months' rent in advance. 3. The company paid Kansas Corp. for the balance due, net of the cash discount, less the $456 credit from merchandise returned on January 24 31 The company paid cash to Lyn Addie tor 10 days work at $135 per day. Feb. 1 The company paid $2,775 cash to Hillside Mall for another three months' rent in advance. 3. The company paid Kansas Corp. for the balance due, net of the cash discount, less the $486 credit from merchandise returned on January 24. 5 The company paid $540 cash to Facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 The company paid a $4,720 cash dividend. 23 The company sold merchandise with a $2,619 cost for $3,288 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $135 per day. 27 The company reimbursed Santana Rey $320 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." Mar. 8 The company purchased $2,818 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $850 cash for minor repairs to the company's computer. 16 The company received $5,368 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $9.968 to Harris Office Products, consisting of amounts created on December 15 (of $1,150) and March 8. 24 The company billed Easy Leasing for $9,147 of computing services provided. 25 The company sold merchandise with a $2,052 cost for $2,910 on credit to Wildcat Services, invoice dated March 25. 30 The company sold merchandise with a $1,168 cost for $2,27e on credit to IFM Company, Invoice dated March 30. 31 The company reimbursed Santana Rey $384 cash for business automobile mileage. The company recorded the reimbursement as Mileage Expense." The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation: a. The March 31 amount of computer supplies still available totals $2,175 b. Prepaid Insurance coverage of $690 expired during this 3-month period c. Lyn Addle has not been paid for seven days of work at the rate of $135 per day d. Prepaid rent of $2,775 expired during this 3-month period e. Depreciation on the computer equipment for January 1 through March 31 is $1,070. Brev 1 23 6 of 63 Next > RO 25. 30 The company sold merchandise with a $1,168 cost for $2,270 on credit to IFM Company, Invoice dated March 30. 31 The company reimbursed Santana Rey $384 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation a. The March 31 amount of computer supplies still available totals $2.175. b. Prepaid Insurance coverage of $690 expired during this 3-month period c. Lyn Addie has not been paid for seven days of work at the rate of $135 per day d. Prepaid rent of $2,775 expired during this 3-month period, e. Depreciation on the computer equipment for January 1 through March 31 is $1,070. f. Depreciation on the office equipment for January 1 through March 31 is $210. 9. The March 31 amount of merchandise inventory still available totals $604 19 Feb 03 9.414 Accounts payable Merchandise inventory Cash los 943 9,320 101 Cash Date Debit Credit Balance Dec. 31 Jan. 04 675 Jan. 05 24,100 2,808 Jan. 09 Jan. 15 710 Jan. 16 4,030 Jan. 17 7,128 Jan. 22 3.663 48,552 47,877 71.977 74,785 74,075 78,105 70,977 74,640 73,290 70,515 61,195 60,655 66.135 61.415 60.335 60.015 1,350 Jan. 31 Feb. 01 2.775 Feb. 03 9.320 X Feb. 05 540 Feb. 11 5,480 Feb. 15 4,720 Feb. 26 1,080 Feb. 27 320 > 25,407 18.710 414 415 Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Sales Sales returns and allowances Sales discounts Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expenso Mileage expense 700 37 13,730 08 0 % 2,565 502 612 613 623 637 640 652 655 676 2.824 X 210 1,070 945 690 2.775 1.295 300 700 37 16,554 210 1,070 3.510 690 2.775 1.295 540 704 540 704 Required 4A Required 4B Prepare an income statement from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Revenues Computer services revenue $ 25,407 Net sales 18.710 44,117 * S Total revenues Expenses Sales returns and allowances Sales discounts Cost of goods sold Depreciation expense-Office equipment 700 X 37% 16.549 210 Computer services revenue Net sales $ 25,407 18,710 X 44,117 X $ 700 X 37 16,549 210 Total revenues Expenses Sales returns and allowances Sales discounts Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Repairs expense--Computer Total expenses Net income 1,070 3,510 690 2,775 1,295 540 850 28,226 15,891 $ Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (b) Use a multiple-step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative. Show less BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Computer services revenue Less Sales discounts Less Sales returns and allowances Net sales 25 407 37 700 737 24,670 (16.549) 8.121 Gross profit Expenses Selling expenses AKT Expenses Selling expenses Wages expense Advertising expense Mileage expense 3,510 540 704 Total selling expenses General and administrative expenses 4,754 210 Depreciation expense-Office equipment Depreciation expense--Computer equipment Insurance expense Rent expense Computer supplies expense Repairs expense--Computer Total general and administrative expenses Total expenses Net income OOOOO 1,070 690 2.775 1.295 850 6,890 11,644 (3,523) $