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 101 Cash 106.1 Alex's Engineering Company 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation 106.6 Gomez Company 106.7 Delta Company 106.8 KC, Incorporated 106.9 119 126 Dream, Incorporated Computer supplies Merchandise inventory 128 Prepaid insurance 131 Prepaid rent 163 Office 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 Common stock 318 319 403 413 Sales Retained earnings Dividends Computer services revenue 414 Sales returns and allowances Depreciation expense-Office equipment Depreciation expense-Computer equipment 415 Sales discounts 502 Cost of goods sold 612 613 623 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 Debit $ 48,562 Credit 0 0 0 3,190 0 2,758 0 0 0 0 670 2,097 885. 8,000 $ 240 20,500 1,130 1,130 980 1,310 72,412 9,460 0 0 0 0 0 0 0 In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms Number BUSINESS SOLUTIONS Partial Work Sheet March 31, 2022 Unadjusted Trial Balance Account Title Debit 101 Cash 106.1 Alex's Engineering Company 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation 106.6 Gomez Company 106.7 Delta Company 106.8 KC, Incorporated 106.9 19 Dream, Incorporated Merchandise inventory 26 Computer supplies 128 Prepaid insurance 131 Prepaid rent 63 164 167 168 Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 13 Sales 414 Sales returns and allowances 15 Sales discounts 502 Cost of goods sold 512 613 523 537 Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Adjustments Credit Debit Adjusted Trial Balance Credit Debit Credit TUU.O 106.9 119 126 KC, incorporated Dream, Incorporated Merchandise inventory Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 164 167 168 201 Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable 210 Wages payable 236 307 Unearned computer services revenue Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 612 613 623 637 640 652 655 Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals 0 0 0 6. Prepare a classified balance sheet (from the adjusted trial balance) as of March 31, 2022. (Report Accounts receivable as a single amount.) Current assets Total current assets Plant assets Total plant assets Total assets Current liabilities Total equity Total liabilities and equity BUSINESS SOLUTIONS Balance Sheet March 31, 2022 Assets 0 0 0 0 $ 0 Liabilities Equity 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, 2022. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. Revenues Total revenues Expenses Total expenses BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2022 0 0 $ 0 < Required 4A Required 4B > 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 (Numbers. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's 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 $245 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 $23,200 cash in the company in exchange for more common stock. January 7 The company purchased $5,800 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. January 9 The company received $2,758 cash from Gomez Company as full payment on its account. January 11 The company completed a five-day project for Alex's Engineering Company and billed it $5,430, which is the total price of $6,740 less the advance payment of $1,310. The company debited Unearned Computer Services Revenue for $1,310. January 13 The company sold merchandise with a retail value of $4,700 and a cost of $3,530 to Liu Corporation, invoice dated January 13. January 15 The company paid $670 cash for freight charges on the merchandise purchased on January 7. January 16 The company received $4,150 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 $700 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 $486. January 26 The company purchased $9,800 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 $4,600 cost for $5,800 on credit to KC, Incorporated, invoice dated January 26. January 31 The company paid cash to Lyn Addie for 10 days' work at $245 per day. February 1 The company paid $2,655 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 $486 credit from merchandise returned on January 24. February 5 The company paid $570 cash to Facebook for an advertisement to appear on February 5 only. February 11 The company received the balance due from Alex's Engineering Company for fees billed on January 11. February 15 The company paid a $4,770 cash dividend. February 23 The company sold merchandise with a $2,570 cost for $3,400 on credit to Delta Company, invoice dated February 23. February 26 The company paid cash to Lyn Addie for eight days' work at $245 per day. February 27 The company reimbursed Santana Rey $320 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." March 8 The company purchased $2,730 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. March 9 The company received the balance due from Delta Company for merchandise sold on February 23. March 11 The company paid $800 cash for minor repairs to the company's computer. March 16 The company received $5,310 cash from Dream, Incorporated, for computing services provided. March 19 The company paid the full amount due of $3,860 to Harris Office Products, consisting of amounts created on December 15 (of $1,130) and March 8. March 24 The company billed Easy Leasing for $9,237 of computing services provided. March 25 The company sold merchandise with a $2,072 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. March 30 The company sold merchandise with a $1,148 cost for $2,230 on credit to IFM Company, invoice dated March 30. March 31 The company reimbursed Santana Rey $224 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." < Prev 3 4 5 6 of 8 --- Next > Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2022. (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. Net sales Expenses Selling expenses BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2022 Total selling expenses General and administrative expenses Total general and administrative expenses Total expenses 0 0 0 0 0 0 $ 0 Show less created on December 15 (of $1,130) and March 8. March 24 The company billed Easy Leasing for $9,237 of computing services provided. March 25 The company sold merchandise with a $2,072 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. March 30 The company sold merchandise with a $1,148 cost for $2,230 on credit to IFM Company, invoice dated March 30. March 31 The company reimbursed Santana Rey $224 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. a. The March 31 amount of computer supplies still available totals $2,045. b. Prepaid Insurance coverage of $699 expired during this three-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $245 per day. d. Prepaid rent of $2,655 expired during this three-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,130. f. Depreciation on the office equipment for January 1 through March 31 is $240. g. The March 31 amount of merchandise inventory still available totals $584. B. Prepare a 6-column work sheet 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. Number BUSINESS SOLUTIONS Partial Work Sheet March 31, 2022 Unadjusted Trial Balance Account Title Debit 101 Cash 106.1 Alex's Engineering Company 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation 106.6 Gomez Company 106.7 Delta Company 106.8 106.9 119 126 KC, Incorporated Dream, Incorporated Merchandise inventory Computer supplies 128 Prepaid insurance 131 Prepaid rent Adjustments Credit Debit Credit Adjusted Trial Balance Debit Credit S --- < Prev 3 4 56 of 8 Next >