Santana Rey created Business Solutions on October 1, 2017. 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, 2017. 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. Account Title Debit Credit No. Cash $48,372 101 106.1 Alex's Engineering Co 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co 106.5 Liu Corp 106.6 Gomez Co 106.7 Delta Co 106.8 KC, Inc 106.9 Dream, Inc 0 3,000 0 2,668 0 0 0 Merchandise inventory 119 Computer supplies Prepaid insurance Prepaid rent office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable 126 580 128 1,665 131 825 163 8,000 164 400 167 20,000 168 1,250 1,100 201 210 Wages payable Unearned computer services revenue Common stock 500 236 1,500 73,000 7,360 307 Retained earnings 318 Dividends 319 Computer services revenue Sales 403 0 413 Sales returns and allowances 414 0 Sales discounts Cost of goods sold Depreciation expense-office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses 415 0 502 0 612 0 613 0 623 0 637 0 640 0 652 0 655 0 676 0 677 0 Repairs expense-Computer 684 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 company's new merchandising activities. Also, Business Solutions does not use reversing entries and, therefore, all revenue and expense accounts have zero beginning balances as of January 1, 2018. Its transactions for January through March follow: O OO 4 The company paid cash to Lyn Addie for five days' work at the rate of $125 per day. Four of the five days relate to wages payable that were accrued in the prior year 5 Santana Rey invested an additional $25,000 cash in the company in exchange for more common stock. 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 $2,668 cash from Gomez Co. as full payment on its account 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,500, which is the total price of $7,000 less the advance payment of $1,500 13 The company sold merchandise with a retail value of $5,200 and a cost of $3,560 to Liu Corp., invoice dated January 13 15 The company paid $600 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,000 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 Liu Corp. returned $500 of defective merchandise from its invoice dated January 13. The returned merchandise, which had a $320 cost, is discarded. (The policy of Business Solutions is to leave the cost of defective products in cost of goods sold.) 22 The company received the balance due from Liu Corp., net of both the discount and the credit for the returned merchandise 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases. The defective merchandise invoice cost, net of the discount, was $496 26 The company purchased $9,000 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 , 640 cost for $5,800 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $125 per day. 1 The company paid $2,475 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 $496 amount in the credit memorandum. Jan Feb. 5 The company paid $600 cash to the local newspaper for an advertising insert in today's paper 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 The company paid $4,800 cash in dividends. 23 The company sold merchandise with a $2,660 cost for $3,220 on credit to Delta Co., invoice dated February 23 26 The company paid cash to Lyn Addie for eight days' work at $125 per day 27 The company reimbursed Santana Rey for business automobile mileage (600 miles at $0.32 per mile) 8 The company purchased $2,730 of computer supplies from Harris office Products on credit, invoice dated March 8. Mar 9 The company received the balance due from Delta Co. for merchandise sold on February 23 11 The company paid $960 cash for minor repairs to the company's computer 16 The company received $5,260 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due to Harris Office Products, consisting of amounts created on December 15 (of $1,100) and March 8. 24 The company billed Easy Leasing for $9,047 of computing services provided. 25 The company sold merchandise with a $2,002 cost for $2,800 on credit to Wildcat Services, invoice dated March 25 30 The company sold merchandise with a $1,048 cost for $2,220 on credit to IFM Company, invoice dated March 30 31 The company reimbursed Santana Rey for business automobile mileage (400 miles at $0.32 per mile) The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation: a. The March 31 amount of computer supplies still available totals $2,005. b. Three more months have expired since the company purchased its annual insurance policy at a $2,220 cost for 12 months of coverage c. Lyn Addie has not been paid for seven days of work at the rate of $125 per day. d. Three months have passed since any prepaid rent has been transferred to expense. The monthly rent expense is $825 e. Depreciation on the computer equipment for January 1 through March 31 is $1.250. f. Depreciation on the office equipment for January 1 through March 31 is $400 g. The March 31 amount of merchandise inventory still available totals $704 3. Prepare a partial work sheet consisting of the first six columns 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. BUSINESS SOLUTIONS Partial Work Sheet March 31, 2018 Unadjusted Trial Balance Adjusted Trial Balance Adjustments No. Account Title Dr. Cr. Dr. Cr. Dr. Cr. 101 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 106.5 Liu Corp 106.6 Gomez Co Cash 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance Prepaid rent 163 131 Office equipment Accumulated depreciation-Office equipment 164 167 Computer equipment Accumulated depreciation-Computer equipment Accounts payable 210 168 201 Wages payable 236 Unearned computer services revenue Common stock Retained earnings 319 307 318 Dividends 403 Computer services revenue 413 Sales Sales returns and allowances Sales discounts 502 414 415 Cost of goods sold Depreciation expense-Office equipment 613 612 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense Rent expense 640 Computer supplies expense Advertising expense 652 655 Mileage expense 676 Miscellaneous expenses 677 Repairs expense--Computer 684 0 0 0 0 0 Totals Santana Rey created Business Solutions on October 1, 2017. 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, 2017. 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. Account Title Debit Credit No. Cash $48,372 101 106.1 Alex's Engineering Co 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co 106.5 Liu Corp 106.6 Gomez Co 106.7 Delta Co 106.8 KC, Inc 106.9 Dream, Inc 0 3,000 0 2,668 0 0 0 Merchandise inventory 119 Computer supplies Prepaid insurance Prepaid rent office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable 126 580 128 1,665 131 825 163 8,000 164 400 167 20,000 168 1,250 1,100 201 210 Wages payable Unearned computer services revenue Common stock 500 236 1,500 73,000 7,360 307 Retained earnings 318 Dividends 319 Computer services revenue Sales 403 0 413 Sales returns and allowances 414 0 Sales discounts Cost of goods sold Depreciation expense-office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses 415 0 502 0 612 0 613 0 623 0 637 0 640 0 652 0 655 0 676 0 677 0 Repairs expense-Computer 684 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 company's new merchandising activities. Also, Business Solutions does not use reversing entries and, therefore, all revenue and expense accounts have zero beginning balances as of January 1, 2018. Its transactions for January through March follow: O OO 4 The company paid cash to Lyn Addie for five days' work at the rate of $125 per day. Four of the five days relate to wages payable that were accrued in the prior year 5 Santana Rey invested an additional $25,000 cash in the company in exchange for more common stock. 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 $2,668 cash from Gomez Co. as full payment on its account 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,500, which is the total price of $7,000 less the advance payment of $1,500 13 The company sold merchandise with a retail value of $5,200 and a cost of $3,560 to Liu Corp., invoice dated January 13 15 The company paid $600 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,000 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 Liu Corp. returned $500 of defective merchandise from its invoice dated January 13. The returned merchandise, which had a $320 cost, is discarded. (The policy of Business Solutions is to leave the cost of defective products in cost of goods sold.) 22 The company received the balance due from Liu Corp., net of both the discount and the credit for the returned merchandise 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases. The defective merchandise invoice cost, net of the discount, was $496 26 The company purchased $9,000 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 , 640 cost for $5,800 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $125 per day. 1 The company paid $2,475 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 $496 amount in the credit memorandum. Jan Feb. 5 The company paid $600 cash to the local newspaper for an advertising insert in today's paper 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 The company paid $4,800 cash in dividends. 23 The company sold merchandise with a $2,660 cost for $3,220 on credit to Delta Co., invoice dated February 23 26 The company paid cash to Lyn Addie for eight days' work at $125 per day 27 The company reimbursed Santana Rey for business automobile mileage (600 miles at $0.32 per mile) 8 The company purchased $2,730 of computer supplies from Harris office Products on credit, invoice dated March 8. Mar 9 The company received the balance due from Delta Co. for merchandise sold on February 23 11 The company paid $960 cash for minor repairs to the company's computer 16 The company received $5,260 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due to Harris Office Products, consisting of amounts created on December 15 (of $1,100) and March 8. 24 The company billed Easy Leasing for $9,047 of computing services provided. 25 The company sold merchandise with a $2,002 cost for $2,800 on credit to Wildcat Services, invoice dated March 25 30 The company sold merchandise with a $1,048 cost for $2,220 on credit to IFM Company, invoice dated March 30 31 The company reimbursed Santana Rey for business automobile mileage (400 miles at $0.32 per mile) The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation: a. The March 31 amount of computer supplies still available totals $2,005. b. Three more months have expired since the company purchased its annual insurance policy at a $2,220 cost for 12 months of coverage c. Lyn Addie has not been paid for seven days of work at the rate of $125 per day. d. Three months have passed since any prepaid rent has been transferred to expense. The monthly rent expense is $825 e. Depreciation on the computer equipment for January 1 through March 31 is $1.250. f. Depreciation on the office equipment for January 1 through March 31 is $400 g. The March 31 amount of merchandise inventory still available totals $704 3. Prepare a partial work sheet consisting of the first six columns 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. BUSINESS SOLUTIONS Partial Work Sheet March 31, 2018 Unadjusted Trial Balance Adjusted Trial Balance Adjustments No. Account Title Dr. Cr. Dr. Cr. Dr. Cr. 101 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 106.5 Liu Corp 106.6 Gomez Co Cash 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance Prepaid rent 163 131 Office equipment Accumulated depreciation-Office equipment 164 167 Computer equipment Accumulated depreciation-Computer equipment Accounts payable 210 168 201 Wages payable 236 Unearned computer services revenue Common stock Retained earnings 319 307 318 Dividends 403 Computer services revenue 413 Sales Sales returns and allowances Sales discounts 502 414 415 Cost of goods sold Depreciation expense-Office equipment 613 612 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense Rent expense 640 Computer supplies expense Advertising expense 652 655 Mileage expense 676 Miscellaneous expenses 677 Repairs expense--Computer 684 0 0 0 0 0 Totals