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 Title	Debit			Credit
101	Cash	$	48,472
106.1	Alexs Engineering Co.		0
106.2	Wildcat Services		0
106.3	Easy Leasing		0
106.4	IFM Co.		3,100
106.5	Liu Corp.		0
106.6	Gomez Co.		2,848
106.7	Delta Co.		0
106.8	KC, Inc.		0
106.9	Dream, Inc.		0
119	Merchandise inventory		0
126	Computer supplies		710
128	Prepaid insurance		2,016
131	Prepaid rent		905
163	Office equipment		8,030
164	Accumulated depreciationOffice equipment				$	210
167	Computer equipment		22,000
168	Accumulated depreciationComputer equipment					1,160
201	Accounts payable					1,140
210	Wages payable					780
236	Unearned computer services revenue					1,380
307	Common stock					75,451
318	Retained earnings					7,960
319	Dividends		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, 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 $195 per day. Four of the five days relate to wages payable that were accrued in the prior year.
		5		Santana Rey invested an additional $23,400 cash in the company in exchange for more common stock.
		7		The company purchased $6,700 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.
		9		The company received $2,848 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 $5,350, which is the total price of $6,730 less the advance payment of $1,380. The company debited Unearned Computer Services Revenue for $1,380.
		13		The company sold merchandise with a retail value of $4,400 and a cost of $3,400 to Liu Corp., invoice dated January 13.
		15		The company paid $630 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		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 $486.
		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 $4,600 cost for $5,910 on credit to KC, Inc., invoice dated January 26.
		31		The company paid cash to Lyn Addie for 10 days work at $195 per day.
Feb.		1		The company paid $2,715 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 credit from merchandise returned on January 24.
		5		The company paid $500 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		The company paid a $4,740 cash dividend.
		23		The company sold merchandise with a $2,650 cost for $3,390 on credit to Delta Co., invoice dated February 23.
		26		The company paid cash to Lyn Addie for eight days work at $195 per day.
		27		The company reimbursed Santana Rey $192 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."
Mar.		8		The company purchased $2,920 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 $860 cash for minor repairs to the companys computer.
		16		The company received $5,410 cash from Dream, Inc., for computing services provided.
		19		The company paid the full amount due of $4,060 to Harris Office Products, consisting of amounts created on December 15 (of $1,140) and March 8.
		24		The company billed Easy Leasing for $9,187 of computing services provided.
		25		The company sold merchandise with a $2,102 cost for $2,900 on credit to Wildcat Services, invoice dated March 25.
		30		The company sold merchandise with a $1,228 cost for $2,360 on credit to IFM Company, invoice dated March 30.
		31		The company reimbursed Santana Rey $160 cash 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:

1. The March 31 amount of computer supplies still available totals $2,125.
2. Prepaid Insurance coverage of $672 expired during this 3-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $195 per day.
4. Prepaid rent of $2,715 expired during this 3-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,160.
6. Depreciation on the office equipment for January 1 through March 31 is $210.
7. The March 31 amount of merchandise inventory still available totals $514.

2. Post the journal entries in part 1 to the accounts in the companys general ledger. Note: Begin with the ledgers post-closing adjusted balances as of December 31, 2019.

Required information 101 Cash Debit Credit 106.1 Accounts Receivable-Alex's Engineering Co. Date Debit Credit Balance Dec. 31 780 23,400 2,848 630 Balance 48,472 47,692 71,092 73,940 73,310 77,310 70,610 74,510 72,560 69,845 4,000 6,700 3,900 1,950 2,715 Date Dec. 31 Jan. 04 Jan. 05 Jan. 09 Jan. 15 Jan. 16 Jan. 17 Jan. 22 Jan. 31 Feb. 01 Feb. 03 Feb. 05 Feb. 11 Feb. 15 Feb. 26 Feb. 27 Mar. 09 Mar. 11 Mar. 16 Mar. 19 Mar. 31 Required information 106.2 Accounts Receivable-Wildcat Services Date Debit Credit Balance Dec. 31 106.3 Accounts Receivable-Easy Leasing Date Debit Credit Balance Dec. 31 0 0 106.4 Accounts ReceivableIFM Co. Debit Credit Date Balance 106.5 Accounts Receivable-Liu Corporation Date Debit Credit Balance Dec. 31 Dec. 31 106.6 Accounts Receivable-Gomez Co. Debit Credit Balance 106.7 Accounts Receivable-Delta Co. Debit Credit Balance Date Dec. 31 Date Dec. 31 Required information 106.8 Accounts ReceivableKC, Inc. Debit Credit 106.9 Accounts Receivable-Dream, Inc. Debit Credit Balance Balance Date Dec. 31 Date Dec. 31 0 119 Merchandise Inventory Debit Credit 126 Computer Supplies Debit Credit Balance Balance Date Dec. 31 Date Dec. 31 0 Required information 128 Prepaid Insurance Debit Credit 131 Prepaid Rent Debit Credit Balance Date Balance Date Dec. 31 Dec. 31 163 Office Equipment Debit Credit Balance Date Dec. 31 164 Accumulated Depreciation - Office Equipment Date Debit Credit Balance Dec. 31 167 Computer Equipment Debit Credit Balance Date Dec. 31 168 Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Dec. 31 Required information 201 Accounts Payable Debit Credit 210 Wages Payable Debit Credit Date Balance Date Balance Dec. 31 Dec. 31 236 Unearned Computer Services Revenue Date Debit Credit Balance Dec. 31 307 Common Stock Debit Credit Date Balance Dec. 31 Required information 318 Retained Earnings Debit Credit 319 Dividends Debit Credit Balance Date Balance Date Dec. 31 403 Computer Services Revenue Debit Credit 413 Sales Debit Credit Date Balance Date Balance 414 Sales Returns and Allowances Debit Credit 415 Sales Discounts Debit Credit Date Balance Date Balance Required information 502 Cost of Goods Sold Debit Credit 612 Depreciation Expense-Office Equipment Date Debit Credit Balance Date Balance 613 Depreciation Expense-Computer Equipment Date Debit Credit Balance 623 Wages Expense Debit Credit Date Balance 637 Insurance Expense Debit Credit 640 Rent Expense Debit Credit Date Balance Date Balance Required information 652 Computer Supplies Expense Debit Credit 655 Advertising Expense Debit Credit Date Balance Date Balance 676 Mileage Expense Debit Credit 677 Miscellaneous Expenses Debit Credit Date Balance Date Balance 684 Repairs Expense-Computer Debit Credit Date Balance B. Prepare a 6-column work sheet that includes the unadjusted trial balance, the March 31 adjustments (a) through (g), and the adjusted rial 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, 2020 Unadjusted Trial Balance Dr. Cr. Adjustments Adjusted Trial Balance Dr. Cr. Dr. Cr. No. Account Title 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IEM 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 Office equipment 164 Accumulated depreciation Office equipment 163 Required information 403 167 Computer equipment 168 Accumulated depreciationComputer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 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 502 Totale n 4. Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. (b) Use a multiple-step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative. Complete this question by entering your answers in the tabs below. Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Revenues Total revenues 0 Expenses Total expenses 0 $ 0 Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (b) Use a multiple-step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative. Show less BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 0 Net sales 0 0 Expenses Selling expenses 0 Total selling expenses General and administrative expenses 0 Total general and administrative expenses Total expenses 0 $ 0 5. Prepare a statement of retained earnings (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended March 31, 2020 Retained earnings, Dec. 31, 2019 0 Retained earnings, March 31, 2020 $ 0