Require 8
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. Credit Debit $ 38,464 13,218 2,645 2,160 2,940 8,700 $ 0 20,800 Number 101 106 126 128 131 163 164 164 167 167 168 201 210 236 307 318 310 319 403 612 613 623 637 640 662 652 655 676 677 684 901 Account Title Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Retained earnings Dividends Com Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment TA Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary Totals 0 0 9 0 70,000 0 Common stock 5,700 30,234 0 0 2,250 0 U 1,698 694 200 765 $ 100,234 0 $ 100,234 Business Solutions had the following transactions and events in December 2021. December 2 Paid $945 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $490 cash for minor repairs to the company's computer. December 4 Received $4,050 cash from Alex's Engineering Company for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $110 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,600 on a proposed project has been accepted. Alex's paid a $2,500 cash advance to Business Solutions. December 15 Purchased $1,500 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 $5,925 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,900 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (400 miles at $0.30 per mile). December 31 Paid $1,400 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 $660 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 $110 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. Prepare a post-closing trial balance as of December 31, 2021. BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2021 Debit Credit Totals $ 0 $ 0
