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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 1,2021. 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 31,2021. 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.
Number Account Title Debit Credit
101 Cash $ 48,472
106.1 Alexs Engineering Company 0
106.2 Wildcat Services 0
106.3 Easy Leasing 0
106.4 IFM Company 3,190
106.5 Liu Corporation 0
106.6 Gomez Company 2,718
106.7 Delta Company 0
106.8 KC, Incorporated 0
106.9 Dream, Incorporated 0
119 Merchandise inventory 0
126 Computer supplies 620
128 Prepaid insurance 1,827
131 Prepaid rent 915
163 Office equipment 8,170
164 Accumulated depreciationOffice equipment $ 360
167 Computer equipment 21,200
168 Accumulated depreciationComputer equipment 1,190
201 Accounts payable 1,280
210 Wages payable 660
236 Unearned computer services revenue 1,380
301 Santana Rey, Capital 82,242
302 Santana 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, Santana 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 (Numbers 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.
January 4 The company paid cash to Lyn Addie for five days work at the rate of $165 per day. Four of the five days relate to wages payable that were accrued in the prior year.
January 5 Santana Rey invested an additional $24,200 cash in the company.
January 7 The company purchased $7,200 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.
January 9 The company received $2,718 cash from Gomez Company as full payment on its account.
January 11 The company completed a five-day project for Alexs Engineering Company and billed it $5,380, which is the total price of $6,760 less the advance payment of $1,380. The company debited Unearned Computer Services Revenue for $1,380.
January 13 The company sold merchandise with a retail value of $4,500 and a cost of $3,390 to Liu Corporation, invoice dated January 13.
January 15 The company paid $640 cash for freight charges on the merchandise purchased on January 7.
January 16 The company received $4,200 cash from Delta Company for computer services provided.
January 17 The company paid Kansas Corporation for the invoice dated January 7, net of the discount.
January 20 The company gave a price reduction (allowance) of $500 to Liu Corporation and credited Liu's accounts receivable for that amount.
January 22 The company received the balance due from Liu Corporation, net of the discount and the allowance.
January 24 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 $476.
January 26 The company purchased $9,700 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB destination, invoice dated January 26.
January 26 The company sold merchandise with a $4,510 cost for $5,930 on credit to KC, Incorporated, invoice dated January 26.
January 31 The company paid cash to Lyn Addie for 10 days work at $165 per day.
February 1 The company paid $2,745 cash to Hillside Mall for another three months rent in advance.
February 3 The company paid Kansas Corporation for the balance due, net of the cash discount, less the $476 credit from merchandise returned on January 24.
February 5 The company paid $590 cash to Facebook for an advertisement to appear on February 5 only.
February 11 The company received the balance due from Alexs Engineering Company for fees billed on January 11.
February 15 Santana Rey withdrew $4,630 cash from the company for personal use.
February 23 The company sold merchandise with a $2,590 cost for $3,420 on credit to Delta Company, invoice dated February 23.
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