Santana Rey created Business Solutions on October 1, 2019. 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, 2019. 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. No.Account TitleDebitCredit101Cash$48,472 106.1Alexs Engineering Co. 0 106.2Wildcat Services 0 106.3Easy Leasing 0 106.4IFM Co. 3,100 106.5Liu Corp. 0 106.6Gomez Co. 2,728 106.7Delta Co. 0 106.8KC, Inc. 0 106.9Dream, Inc. 0 119Merchandise inventory 0 126Computer supplies 780 128Prepaid insurance 1,881 131Prepaid rent 845 163Office equipment 8,050 164Accumulated depreciationOffice equipment $350 167Computer equipment 20,700 168Accumulated depreciationComputer equipment 1,110 201Accounts payable 1,150 210Wages payable 860 236Unearned computer services revenue 1,310 301S. Rey, Capital 81,776 302S. Rey, Withdrawals 0 403Computer services revenue 0 413Sales 0 414Sales returns and allowances 0 415Sales discounts 0 502Cost of goods sold 0 612Depreciation expenseOffice equipment 0 613Depreciation expenseComputer equipment 0 623Wages expense 0 637Insurance expense 0 640Rent expense 0 652Computer supplies expense 0 655Advertising expense 0 676Mileage expense 0 677Miscellaneous expenses 0 684Repairs expenseComputer 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 companys new merchandising activities. Its transactions for January through March follow: Jan. 4 The company paid cash to Lyn Addie for five days work at the rate of $215 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,100 cash in the company. 7 The company purchased $7,100 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,728 cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alexs Engineering Co. and billed it $5,480, which is the total price of $6,790 less the advance payment of $1,310. The company debited Unearned Computer Services Revenue for $1,310. 13 The company sold merchandise with a retail value of $4,000 and a cost of $3,520 to Liu Corp., invoice dated January 13. 15 The company paid $720 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,140 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 The company gave a price reduction (allowance) of $500 to Liu Corp., and credited Liu's accounts receivable for that amount. 22 The company received the balance due from Liu Corp., net of the discount and the allowance. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $496. 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 $4,570 cost for $5,840 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days work at $215 per day.Feb. 1 The company paid $2,535 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 credit from merchandise returned on January 24. 5 The company paid $460 cash to Facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alexs Engineering Co. for fees billed on January 11. 15 Santana Rey withdrew $4,630 cash from the company for personal use. 23 The company sold merchandise with a $2,530 cost for $3,330 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days work at $215 per day. 27 The company reimbursed Santana Rey $256 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."Mar. 8 The company purchased $2,810 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $820 cash for minor repairs to the companys computer. 16 The company received $5,430 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $3,960 to Harris Office Products, consisting of amounts created on December 15 (of $1,150) and March 8. 24 The company billed Easy Leasing for $9,057 of computing services provided. 25 The company sold merchandise with a $2,022 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. 30 The company sold merchandise with a $1,178 cost for $2,330 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $224 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation:

The March 31 amount of computer supplies still available totals $2,135.

Prepaid Insurance coverage of $627 expired during this 3-month period.

Lyn Addie has not been paid for seven days of work at the rate of $215 per day.

Prepaid rent of $2,535 expired during this 3-month period.

Depreciation on the computer equipment for January 1 through March 31 is $1,110.

Depreciation on the office equipment for January 1 through March 31 is $350.

The March 31 amount of merchandise inventory still available totals $514.

The company paid cash to Lyn Addie for five days work at the rate of $215 per day. Four of the five days relate to wages payable that were accrued in the prior year.

2

Santana Rey invested an additional $24,100 cash in the company.

3

The company purchased $7,100 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.

4

The company received $2,728 cash from Gomez Co. as full payment on its account.

5

The company completed a five-day project for Alexs Engineering Co. and billed it $5,480, which is the total price of $6,790 less the advance payment of $1,310. The company debited Unearned Computer Services Revenue for $1,310.

6

The company sold merchandise with a retail value of $4,000 and a cost of $3,520 to Liu Corp., invoice dated January 13.

7

Record the cost of January 13 sale.

8

The company paid $720 cash for freight charges on the merchandise purchased on January 7.

9

The company received $4,140 cash from Delta Co. for computer services provided.

10

The company paid Kansas Corp. for the invoice dated January 7, net of the discount.

11

The company gave a price reduction (allowance) of $500 to Liu Corp., and credited Liu's accounts receivable for that amount.

12

The company received the balance due from Liu Corp., net of the discount and the allowance.

13

The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $496.

14

The company purchased $9,400 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26.

15

The company sold merchandise with a $4,570 cost for $5,840 on credit to KC, Inc., invoice dated January 26.

16

Record the cost of January 26 sale.

17

The company paid cash to Lyn Addie for 10 days work at $215 per day.

18

The company paid $2,535 cash to Hillside Mall for another three months rent in advance.

19

The company paid Kansas Corp. for the balance due, net of the cash discount, less the $496 credit from merchandise returned on January 24.

20

The company paid $460 cash to Facebook for an advertisement to appear on February 5 only.

21

The company received the balance due from Alexs Engineering Co. for fees billed on January 11.

22

Santana Rey withdrew $4,630 cash from the company for personal use.

23

The company sold merchandise with a $2,530 cost for $3,330 on credit to Delta Co., invoice dated February 23.

24

Record the cost of February 23 sale.

25

The company paid cash to Lyn Addie for eight days work at $215 per day.

26

The company reimbursed Santana Rey $256 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."

27

The company purchased $2,810 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8.

28

The company received the balance due from Delta Co. for merchandise sold on February 23.

29

The company paid $820 cash for minor repairs to the companys computer.

30

The company received $5,430 cash from Dream, Inc., for computing services provided.

31

The company paid the full amount due of $3,960 to Harris Office Products, consisting of amounts created on December 15 (of $1,150) and March 8.

32

The company billed Easy Leasing for $9,057 of computing services provided.

33

The company sold merchandise with a $2,022 cost for $2,800 on credit to Wildcat Services, invoice dated March 25.

34

Record the cost of March 25 sale.

35

The company sold merchandise with a $1,178 cost for $2,330 on credit to IFM Company, invoice dated March 30.

36

Record the cost of March 30 sale.

37

The company reimbursed Santana Rey $224 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."