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Santana Rey created Business Solutions on October 1 , 2 0 2 1 . The company has been successful, and its list of customers has
Santana Rey created Business Solutions on October 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 Santana Rey decided to add a fourth digit with a decimal point to the 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.
Number Account Title Debit Credit
Cash $
Alexs Engineering Company
Wildcat Services
Easy Leasing
IFM Company
Liu Corporation
Gomez Company
Delta Company
KC Incorporated
Dream, Incorporated
Merchandise inventory
Computer supplies
Prepaid insurance
Prepaid rent
Office equipment
Accumulated depreciationOffice equipment $
Computer equipment
Accumulated depreciationComputer equipment
Accounts payable
Wages payable
Unearned computer services revenue
Santana Rey, Capital
Santana Rey, Withdrawals
Computer services revenue
Sales
Sales returns and allowances
Sales discounts
Cost of goods sold
Depreciation expenseOffice equipment
Depreciation expenseComputer equipment
Wages expense
Insurance expense
Rent expense
Computer supplies expense
Advertising expense
Mileage expense
Miscellaneous expenses
Repairs expenseComputer
In response to requests from customers, Santana Rey will begin selling computer software. The company will extend credit terms of n FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts Numbers and are added to its general ledger to accommodate the companys new merchandising activities. Its transactions for January through March follow.
January The company paid cash to Lyn Addie for five days work at the rate of $ per day. Four of the five days relate to wages payable that were accrued in the prior year.
January Santana Rey invested an additional $ cash in the company.
January The company purchased $ of merchandise from Kansas Corporation with terms of n FOB shipping point, invoice dated January
January The company received $ cash from Gomez Company as full payment on its account.
January The company completed a fiveday project for Alexs Engineering Company and billed it $ which is the total price of $ less the advance payment of $ The company debited Unearned Computer Services Revenue for $
January The company sold merchandise with a retail value of $ and a cost of $ to Liu Corporation, invoice dated January
January The company paid $ cash for freight charges on the merchandise purchased on January
January The company received $ cash from Delta Company for computer services provided.
January The company paid Kansas Corporation for the invoice dated January net of the discount.
January The company gave a price reduction allowance of $ to Liu Corporation and credited Liu's accounts receivable for that amount.
January The company received the balance due from Liu Corporation, net of the discount and the allowance.
January The company returned defective merchandise to Kansas Corporation and accepted a credit against future purchases debited accounts payable The defective merchandise invoice cost, net of the discount, was $
January The company purchased $ of merchandise from Kansas Corporation with terms of n FOB destination, invoice dated January
January The company sold merchandise with a $ cost for $ on credit to KC Incorporated, invoice dated January
January The company paid cash to Lyn Addie for days work at $ per day.
February The company paid $ cash to Hillside Mall for another three months rent in advance.
February The company paid Kansas Corporation for the balance due, net of the cash discount, less the $ credit from merchandise returned on January
February The company paid $ cash to Facebook for an advertisement to appear on February only.
February The company received the balance due from Alexs Engineering Company for fees billed on January
February Santana Rey withdrew $ cash from the company for personal use.
February The company sold merchandise with a $ cost for $ on credit to Delta Company, invoice dated February
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