Requirements
- General Journal Entries
- Adjusting Entries
- Post Transaction to general ledger
- Adjusted trial balance
- Income Statement
- Statement of retained earnings
- Balance sheet
- Closing entries
- Post-closing trial balance
0 On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2019. After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows. No. Account Title Debit Credit 101 Cash $ 38,564 106 Accounts receivable 13,518 126 Computer supplies 2,645 128 Prepaid insurance 2.040 131 Prepaid rent 3,040 163 Office equipment 8,500 164 Accumulated depreciation - Office equipment 167 Computer equipment 21,600 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 67,000 318 Retained earnings 0 319 Dividends 5,700 403 Computer services revenue 34,464 612 Depreciation expense-Office equipment 0 613 Depreciation expense--Computer equipment 623 Wages expense 2,600 637 Insurance expense 640 Rent expense 652 Computer supplies expense 0 655 Advertising expense 1,658 676 Mileage expense 654 677 Miscellaneous expenses 230 684 Repairs expense-Computer 715 Totals $101,464 $101,464 OOOO 0 O Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $990 cash to Hillside Mall for Business Solutions' share of all advertising costs. 3 Paid $460 cash for minor repairs to the company's computer. 4 Received $4,550 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $105 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,100 on a proposed project has been accepted. Alex's paid a $2,000 cash advance to Business Solutions. 15 Purchased $1,700 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 20 Completed a project for Liu Corporation and received $6,325 cash. 22-26 Took the week off for the holidays. 28 Received $3,400 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.29 per mile) 31 The company paid $1,300 cash in 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 $640 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 $105 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 and events for Business Solutions. 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, 2019. 4. Prepare an income statement for the three months ended December 31, 2019. 5. Prepare a statement of retained earnings for the three months ended December 31, 2019. 6. Prepare a balance sheet as of December 31, 2019. 7. Record and post the necessary closing entries as of December 31, 2019. 8. Prepare a post-closing trial balance as of December 31, 2019. 0 On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2019. After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows. No. Account Title Debit Credit 101 Cash $ 38,564 106 Accounts receivable 13,518 126 Computer supplies 2,645 128 Prepaid insurance 2.040 131 Prepaid rent 3,040 163 Office equipment 8,500 164 Accumulated depreciation - Office equipment 167 Computer equipment 21,600 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 67,000 318 Retained earnings 0 319 Dividends 5,700 403 Computer services revenue 34,464 612 Depreciation expense-Office equipment 0 613 Depreciation expense--Computer equipment 623 Wages expense 2,600 637 Insurance expense 640 Rent expense 652 Computer supplies expense 0 655 Advertising expense 1,658 676 Mileage expense 654 677 Miscellaneous expenses 230 684 Repairs expense-Computer 715 Totals $101,464 $101,464 OOOO 0 O Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $990 cash to Hillside Mall for Business Solutions' share of all advertising costs. 3 Paid $460 cash for minor repairs to the company's computer. 4 Received $4,550 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $105 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,100 on a proposed project has been accepted. Alex's paid a $2,000 cash advance to Business Solutions. 15 Purchased $1,700 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 20 Completed a project for Liu Corporation and received $6,325 cash. 22-26 Took the week off for the holidays. 28 Received $3,400 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.29 per mile) 31 The company paid $1,300 cash in 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 $640 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 $105 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 and events for Business Solutions. 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, 2019. 4. Prepare an income statement for the three months ended December 31, 2019. 5. Prepare a statement of retained earnings for the three months ended December 31, 2019. 6. Prepare a balance sheet as of December 31, 2019. 7. Record and post the necessary closing entries as of December 31, 2019. 8. Prepare a post-closing trial balance as of December 31, 2019
