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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,

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 Debit Credit
101 Cash $ 48,412
106.1 Alexs Engineering Company 0
106.2 Wildcat Services 0
106.3 Easy Leasing 0
106.4 IFM Company 3,170
106.5 Liu Corporation 0
106.6 Gomez Company 2,788
106.7 Delta Company 0
106.8 KC, Incorporated 0
106.9 Dream, Incorporated 0
119 Merchandise inventory 0
126 Computer supplies 620
128 Prepaid insurance 1,827
131 Prepaid rent 885
163 Office equipment 8,130
164 Accumulated depreciationOffice equipment $ 340
167 Computer equipment 21,500
168 Accumulated depreciationComputer equipment 1,230
201 Accounts payable 1,230
210 Wages payable 700
236 Unearned computer services revenue 1,330
301 S. Rey, Capital 82,502
302 S. Rey, Withdrawals 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.

January 4 The company paid cash to Lyn Addie for five days work at the rate of $175 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 $24,800 cash in the company.
January 7 The company purchased $5,900 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.
January 9 The company received $2,788 cash from Gomez Company as full payment on its account.
January 11 The company completed a five-day project for Alexs Engineering Company and billed it $5,360, which is the total price of $6,690 less the advance payment of $1,330. The company debited Unearned Computer Services Revenue for $1,330.
January 13 The company sold merchandise with a retail value of $4,900 and a cost of $3,400 to Liu Corporation, invoice dated January 13.
January 15 The company paid $680 cash for freight charges on the merchandise purchased on January 7.
January 16 The company received $4,020 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 $500 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 $496.
January 26 The company purchased $9,400 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 $4,570 cost for $5,860 on credit to KC, Incorporated, invoice dated January 26.
January 31 The company paid cash to Lyn Addie for 10 days work at $175 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 $496 credit from merchandise returned on January 24.
February 5 The company paid $500 cash to Facebook for an advertisement to appear on February 5 only.
February 11 The company received the balance due from Alexs Engineering Company for fees billed on January 11.
February 15 S. Rey withdrew $4,780 cash from the company for personal use.
February 23 The company sold merchandise with a $2,560 cost for $3,290 on credit to Delta Company, invoice dated February 23.
February 26 The company paid cash to Lyn Addie for eight days work at $175 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 $2,830 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 $820 cash for minor repairs to the companys computer.
March 16 The company received $5,320 cash from Dream, Incorporated, for computing services provided.
March 19 The company paid the full amount due of $4,060 to Harris Office Products, consisting of amounts created on December 15 (of $1,230) and March 8.
March 24 The company billed Easy Leasing for $9,227 of computing services provided.
March 25 The company sold merchandise with a $2,042 cost for $2,890 on credit to Wildcat Services, invoice dated March 25.
March 30 The company sold merchandise with a $1,068 cost for $2,400 on credit to IFM Company, invoice dated March 30.
March 31 The company reimbursed Santana Rey $64 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 $2,055.
  2. Prepaid Insurance coverage of $609 expired during this three-month period.
  3. Lyn Addie has not been paid for seven days of work at the rate of $175 per day.
  4. Prepaid rent of $2,655 expired during this three-month period.
  5. Depreciation on the computer equipment for January 1 through March 31 is $1,230.
  6. Depreciation on the office equipment for January 1 through March 31 is $340.
  7. The March 31 amount of merchandise inventory still available totals $534.

SP 5 Serial Problem Part 3 (Algo)

3. 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

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