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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,

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[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 Debit Credit
101 Cash $ 48,482
106.1 Alexs Engineering Co. 0
106.2 Wildcat Services 0
106.3 Easy Leasing 0
106.4 IFM Co. 3,080
106.5 Liu Corp. 0
106.6 Gomez Co. 2,768
106.7 Delta Co. 0
106.8 KC, Inc. 0
106.9 Dream, Inc. 0
119 Merchandise inventory 0
126 Computer supplies 680
128 Prepaid insurance 1,827
131 Prepaid rent 845
163 Office equipment 8,140
164 Accumulated depreciationOffice equipment $ 220
167 Computer equipment 20,000
168 Accumulated depreciationComputer equipment 1,220
201 Accounts payable 1,140
210 Wages payable 860
236 Unearned computer services revenue 1,420
301 S. Rey, Capital 80,962
302 S. Rey, Withdrawals 0
403 Computer services revenue 0
413 Sales 0
414 Sales returns and allowances 0
415 Sales discounts 0
502 Cost of goods sold 0
612 Depreciation expenseOffice equipment 0
613 Depreciation expenseComputer equipment 0
623 Wages expense 0
637 Insurance expense 0
640 Rent expense 0
652 Computer supplies expense 0
655 Advertising expense 0
676 Mileage expense 0
677 Miscellaneous expenses 0
684 Repairs expenseComputer 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 companys 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 $215 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.
7 The company purchased $5,800 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.
9 The company received $2,768 cash from Gomez Co. as full payment on its account.
11 The company completed a five-day project for Alexs Engineering Co. and billed it $5,420, which is the total price of $6,840 less the advance payment of $1,420. The company debited Unearned Computer Services Revenue for $1,420.
13 The company sold merchandise with a retail value of $4,100 and a cost of $3,400 to Liu Corp., invoice dated January 13.
15 The company paid $630 cash for freight charges on the merchandise purchased on January 7.
16 The company received $4,060 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 $4,550 cost for $5,840 on credit to KC, Inc., invoice dated January 26.
31 The company paid cash to Lyn Addie for 10 days work at $215 per day.
Feb. 1 The company paid $2,535 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 $440 cash to Facebook for an advertisement to appear on February 5 only.
11 The company received the balance due from Alexs Engineering Co. for fees billed on January 11.
15 Santana Rey withdrew $4,720 cash from the company for personal use.
23 The company sold merchandise with a $2,530 cost for $3,390 on credit to Delta Co., invoice dated February 23.
26 The company paid cash to Lyn Addie for eight days work at $215 per day.
27 The company reimbursed Santana Rey $224 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."
Mar. 8 The company purchased $2,750 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 $770 cash for minor repairs to the companys computer.
16 The company received $5,320 cash from Dream, Inc., for computing services provided.
19 The company paid the full amount due of $3,890 to Harris Office Products, consisting of amounts created on December 15 (of $1,140) and March 8.
24 The company billed Easy Leasing for $9,117 of computing services provided.
25 The company sold merchandise with a $2,202 cost for $2,840 on credit to Wildcat Services, invoice dated March 25.
30 The company sold merchandise with a $1,088 cost for $2,270 on credit to IFM Company, invoice dated March 30.
31 The company reimbursed Santana Rey $224 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:

  1. The March 31 amount of computer supplies still available totals $2,095.
  2. Prepaid Insurance coverage of $609 expired during this 3-month period.
  3. Lyn Addie has not been paid for seven days of work at the rate of $215 per day.
  4. Prepaid rent of $2,535 expired during this 3-month period.
  5. Depreciation on the computer equipment for January 1 through March 31 is $1,220.
  6. Depreciation on the office equipment for January 1 through March 31 is $220.
  7. The March 31 amount of merchandise inventory still available totals $644.

Part 1: Prepare journal entries to record each of the January through March transactions.

Part 2: Post the journal entries in part 1 to the accounts in the companys general ledger. Note: Begin with the ledgers post-closing adjusted balances as of December 31, 2019.

Part 3: Prepare 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.

Part 4a) Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2018. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses

Part 4b) Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2018. (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.

Part 5) Prepare a statement of owners equity (from the adjusted trial balance in part 3) for the three months ended March 31, 2020.

Part 6) Prepare a classified balance sheet (from the adjusted trial balance) as of March 31, 2020.

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