Prepare a 6-column work sheet that includes the unadjusted trial balance, the March 31 adjustments (a) through (g), and the adjusted trial balance. Do not prepare closing entries and do not journalize the adjustments or post them to the ledger.
Required information (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. Credit Debit $ 48,402 0 0 0 3,050 0 2,748 0 0 0 0 620 1,827 865 8,190 $ 320 21,700 201 No. Account Title 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 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 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock Retained earnings 319 Dividends 403 Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 Deprec ation expense office equ nt 613 Depreciation expense-Computer equipment Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer 1,200 1,160 740 1,300 74,722 7,960 0 0 0 623 0 0 0 0 0 0 0 0 0 0 0 0 0 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 $185 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,200 cash in the company in exchange for more common stock. 7 The company purchased $6,000 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,748 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 $5,380, which is the total price of $6,680 less the advance payment of $1,300. The company debited Unearned Computer Services Revenue for $1,300. 13 The company sold merchandise with a retail value of $4,400 and a cost of $3,410 to Liu Corp., invoice dated January 13. 15 The company paid $730 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,090 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 $400 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 $9,200 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 $4,490 cost for $5,980 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $185 per day. Feb. 1 The company paid $2,595 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 $590 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 $4,770 cash dividend. 23 The company sold merchandise with a $2,510 cost for $3,230 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $185 per day. 27 The company reimbursed Santana Rey $128 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." Mar 8 The company purchased $2,830 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 $920 cash for minor repairs to the company's computer. 16 The company received $5,370 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $3,990 to Harris Office Products, consisting of amounts created on December 15 (of $1,160) and March 8. 24 The company billed Easy Leasing for $9,097 of computing services provided. 25 The company sold merchandise with a $2,122 cost for $2,880 on credit to Wildcat Services, invoice dated March 25. 30 The company sold merchandise with a $1,248 cost for $2,350 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $320 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 $2,035. b. Prepaid Insurance coverage of $609 expired during this 3-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $185 per day. d. Prepaid rent of $2,595 expired during this 3-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,200. f. Depreciation on the office equipment for January 1 through March 31 is $320. g. The March 31 amount of merchandise inventory still available totals $694. BUSINESS SOLUTIONS Partial Work Sheet March 31, 2020 Unadjusted Trial Balance Dr. Cr. Adjustments Adjusted Trial Balance Dr. Cr. Dr. Cr. 128 167 No. Account Title 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 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 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation Office equipment 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 403 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 684 Repairs expense-Computer Totals
