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 Debit $48,502 Account Title Credit No. 101 Cash 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. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 0ffice equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 301 S. Rey, Capital 302 S. Rey, Withdrawals 403 Computer services revenue 413 Sales 3,110 2,718 690 1,785 755 8,080 $400 20,400 1,240 1,230 500 1,340 81,330 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 Depreciation expense-Office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer 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: Jan 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 $24,400 cash in the company. 7 The company purchased $6,300 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,718 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 $5,350, which is the total price of $6,690 less the advance payment of $1,340 13 The company sold merchandise with a retail value of $4,800 and a cost of $3,410 to Liu Corp., invoice dated January 13 15 The company paid $740 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 $270 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 $486 26 The company purchased $9,400 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 $4,460 cost for $6,000 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 $2,355 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 amount in the credit memorandum. 5 The company paid $590 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 Santana Rey withdrew $4,760 cash from the company for personal use. 23 The company sold merchandise with a $2,510 cost for $3,270 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 $2,760 of computer supplies from Harris Office Products on credit, invoice dated March 8 9 The company received the balance due from Delta Co. for merchandise sold on February 23 11 The company paid $890 cash for minor repairs to the company's computer 16 The company received $5,410 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 $1,230) and March 8 24 The company billed Easy Leasing for $9,107 of computing services provided 25 The company sold merchandise with a $2,142 cost for $2,810 on credit to Wildcat Services, invoice dated March 25 30 The company sold merchandise with a $1,228 cost for $2,370 on credit to IFM Company, invoice dated March 30 31 The company reimbursed Santana Rey for business automobile mileage (600 miles at $0.32 per mile) Enter the Business Solutions transactions for January through March in a sales journal SALES JOURNAL Cost of Goods Date Account Debited Receivable Dr.Sold Dr Sales Cr Inventory Cr. Mar. 31Totals Enter the Business Solutions transactions for January through March in a cash receipts journal. CASH RECEIPTS JOURNAL Other Cost of Goods Accts. Cr. Inventory Cr Accounts Services Account Credited Cash Dr. Discount Receivable Revenue Sales Date Sold Dr Dr. Cr. Cr. Mar. 31 Totals PURCHASES JOURNAL Computer Other Accounts Inventory Supplies Accounts Date of Invoice Terms Payable Cr Date Account Dr. Dr. Dr. Mar. 31 Totals CASH DISBURSEMENTS JOURNAL Other Accounts Dr. Accounts Payable Dr Account Debited Cash Cr.Inventory Date Payee Cr. Jan. 04 Mar. 31 Totals Import a new list 1 Record the additional cash investment by Santana Rey. / 2 Record the entry for completion of a five-day project for Alex's Engineering Co. and billing it $5,350, which is the total price of $6,690 less the advance payment of $1,340. Record the entry for return of defective merchandise which had a sales price of $500 cost. 3 Record the entry for return of defective merchandise which had a $486 cost. 4 5 Record the entry for providing computer services to Easy Leasing for $9,107 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 Debit $48,502 Account Title Credit No. 101 Cash 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. 119 Merchandise inventory 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 0ffice equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 301 S. Rey, Capital 302 S. Rey, Withdrawals 403 Computer services revenue 413 Sales 3,110 2,718 690 1,785 755 8,080 $400 20,400 1,240 1,230 500 1,340 81,330 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 Depreciation expense-Office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer 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: Jan 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 $24,400 cash in the company. 7 The company purchased $6,300 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,718 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 $5,350, which is the total price of $6,690 less the advance payment of $1,340 13 The company sold merchandise with a retail value of $4,800 and a cost of $3,410 to Liu Corp., invoice dated January 13 15 The company paid $740 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 $270 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 $486 26 The company purchased $9,400 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 $4,460 cost for $6,000 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 $2,355 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 amount in the credit memorandum. 5 The company paid $590 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 Santana Rey withdrew $4,760 cash from the company for personal use. 23 The company sold merchandise with a $2,510 cost for $3,270 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 $2,760 of computer supplies from Harris Office Products on credit, invoice dated March 8 9 The company received the balance due from Delta Co. for merchandise sold on February 23 11 The company paid $890 cash for minor repairs to the company's computer 16 The company received $5,410 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 $1,230) and March 8 24 The company billed Easy Leasing for $9,107 of computing services provided 25 The company sold merchandise with a $2,142 cost for $2,810 on credit to Wildcat Services, invoice dated March 25 30 The company sold merchandise with a $1,228 cost for $2,370 on credit to IFM Company, invoice dated March 30 31 The company reimbursed Santana Rey for business automobile mileage (600 miles at $0.32 per mile) Enter the Business Solutions transactions for January through March in a sales journal SALES JOURNAL Cost of Goods Date Account Debited Receivable Dr.Sold Dr Sales Cr Inventory Cr. Mar. 31Totals Enter the Business Solutions transactions for January through March in a cash receipts journal. CASH RECEIPTS JOURNAL Other Cost of Goods Accts. Cr. Inventory Cr Accounts Services Account Credited Cash Dr. Discount Receivable Revenue Sales Date Sold Dr Dr. Cr. Cr. Mar. 31 Totals PURCHASES JOURNAL Computer Other Accounts Inventory Supplies Accounts Date of Invoice Terms Payable Cr Date Account Dr. Dr. Dr. Mar. 31 Totals CASH DISBURSEMENTS JOURNAL Other Accounts Dr. Accounts Payable Dr Account Debited Cash Cr.Inventory Date Payee Cr. Jan. 04 Mar. 31 Totals Import a new list 1 Record the additional cash investment by Santana Rey. / 2 Record the entry for completion of a five-day project for Alex's Engineering Co. and billing it $5,350, which is the total price of $6,690 less the advance payment of $1,340. Record the entry for return of defective merchandise which had a sales price of $500 cost. 3 Record the entry for return of defective merchandise which had a $486 cost. 4 5 Record the entry for providing computer services to Easy Leasing for $9,107