Serial problem $4$ 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. No$.$Account titlesDebitCredit$101$Cash$$48,372106\mathrm{.}1$Alexs engineering Co$\mathrm{.}0106\mathrm{.}2$Wildcat service$0106\mathrm{.}3$Easy leasing$0106\mathrm{.}4$IFM Co$\mathrm{.}3,000106\mathrm{.}5$Liu Co$\mathrm{.}0106\mathrm{.}6$Gomez Co$\mathrm{.}2,668106\mathrm{.}7$Delta Co$\mathrm{.}0106\mathrm{.}8$KC Inc$0106\mathrm{.}9$Dream Inc$0119$Merchandise inventory$0126$Computer supplies$580128$Prepaid insurance$1,665131$Prepaid rent$825163$Office supplies$8,000164$Accumulated depreciation$-$ office equipment $$400167$Computer equipment$20,000168$Accumulated depreciation$-$computer equipment $1,250201$Accounts payable $1,100$ No$.$Account titlesDebitCredit$210$Wages payable $$500236$Unearned computer services revenue $1,500307$Common stock $73,000318$Retained earnings $7,360319$Dividends$$0403$Computer service revenue $0413$Sales $0414$Sale returns and allowances$0415$Sales discount$0502$Cost of goods sold$0612$Depreciation expenses$-$office equipment$0613$Depreciation expense$-$computer equipment$0623$Wages expense$0637$Insurance expense$0640$Rent expense$0652$Computer supplies expense$0655$Advertising expense$0676$Mileage expense$0677$Miscellaneous expenses$0684$Repair expense$-$computer$0$ In response to requests from customers, S$.$ Rey will begin selling computer software. The company will extend credit terms of $1/10,1/30,$ 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. Its transactions for January through March follow. Jan. $4$ The company paid cash to Lyn Addie for five days' work at the rate of $$125$ per day. Four of the five days relate to wagespayable that were accrued in the prior year$\mathrm{.}5$ Santana Rey invested an additional $$25,000$ cash in the company in exchange for more common stock$\mathrm{.}7$ The company purchased $$5,800$ of merchandise from Kansas Corp. with terms of $1/10,$ n$/30,$ FOB shipping point, invoice dated January $7\mathrm{.}9$ The company received $$2,668$ cash from Gomez Co$.$ as full payment on its account$\mathrm{.}11$ The company completed a five$-$day project for Alex's Engineering Co$.$ and billed it $$5,500,$ which is the total price of $$7,000$ less the advance payment of $$1,500.$ The company debited Unearned Computer Services Revenue for $$1,500\mathrm{.}13$ The company sold merchandise with a retail value of $$5,200$ and a cost of $$3,560$ to Liu Corp., invoice dated January $13\mathrm{.}15$ The company paid $$600$ cash for freight charges on the merchandise purchased on January $7\mathrm{.}16$ The company received $$4,000$ cash from Delta Co$.$ for computer services provided$\mathrm{.}17$ The company paid Kansas Corp. for the invoice dated January $7,$ net of the discount$\mathrm{.}20$ The company gave a price reduction $($allowance$)$ of $$500$ to Liu Corp. and credited Liu's accounts receivable for that amount$\mathrm{.}22$ The company received the balance due from Liu Corp., net of the discount and the allowance$\mathrm{.}24$ The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases $($debited accounts payable$).$ The defective merchandise invoice cost, net of the discount, was $$496\mathrm{.}26$ The company purchased $$9,000$ of merchandise from Kansas Corp. with terms of $1/10,$ n$/30,$ FOB destination, invoice dated January $26\mathrm{.}26$ The company sold merchandise with a $$4,640$ cost for $$5,800$ on credit to KC$,$ Inc., invoice dated January $26\mathrm{.}31$ The company paid cash to Lyn Addie for $10$ days' work at $$125$ per day.Feb$\mathrm{.}1$ The company paid $$2,475$ cash to Hillside Mall for another three months' rent in advance$\mathrm{.}3$ The company paid Kansas Corp. for the balance due, net of the cash discount, less the $$496$ credit from merchandise returned on January $24\mathrm{.}5$ The company paid $$600$ cash to Facebook for an advertisement to appear on February $5$ only$11$ The company received the balance due from Alex's Engineering Co$.$ for fees billed on January $11\mathrm{.}15$ The company paid a $$4,800$ cash dividend$\mathrm{.}23$ he company sold merchandise with a $$2,660$ cost for $$3,220$ on credit to Delta Co$.,$ invoice dated February$26$ The company paid cash to Lyn Addie for eight days' work at $$125$ per day$\mathrm{.}27$ The company reimbursed Santana Rey $$192$ cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."Mar. $8$ The company purchased $$2,730$ of computer supplies from Harris Office Products on credit with terms of $1/30,$ FOB destination, invoice dated March $8\mathrm{.}9$ The company received the balance due from Delta Co$.$ for merchandise sold on February $23\mathrm{.}11$ The company paid $$960$ cash for minor repairs to the company's computer$\mathrm{.}16$ The company received $$5,260$ cash from Dream, Inc., for computing services provided$\mathrm{.}19$ The company paid the full amount due of $$3,830$ to Harris Office Products, consisting of amounts created on December$15($of $$1,100)$ and March $8\mathrm{.}24$ The company billed Easy Leasing for $$9,047$ of computing services provided$\mathrm{.}25$ The company sold merchandise with a $$2,002$ cost for $$2,800$ on credit to Wildcat Services, invoice dated March $25\mathrm{.}30$ The company sold merchandise with a $$1,048$ cost for $$2,220$ on credit to IFM Company, invoice dated March $31$The company reimbursed Santana Rey $$128$ cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." The following additional facts are available for preparing adjustments on March $31$ prior to financial statement preparation.A$.$ The March $31$ amount of computer supplies still available totals $$2,005.$B$.$ Prepaid insurance coverage of $$555$ expired during this three$-$month period.C$.$ Lyn Addie has not been paid for seven days of work at the rate of $$125$ per day.D$.$ Prepaid rent of $$2,475$ expired during this three$-$month period.E$.$ Depreciation on the computer equipment for January $1$ through March $31$ is $$1,250.$F$.$ Depreciation on the office equipment for January $1$ through March $31$ is $$400.$G$.$ The March $31$ amount of merchandise inventory still available totals $$704\mathrm{.}79\%$Required$1.$ Prepare journal entries to record each of the January through March transactions. $2.$ Post the journal entries in part $1$ to the accounts in the company's general ledger. Note: Begin with the ledger's post$-$closing adjusted balances as of December $31,2021.3.$ Prepare a $6-$column work sheet $($similar to the one shown in $($ Exhibit $3\mathrm{.}13)$ 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

$4.$ Prepare an income statement $($from the adjusted trial balance in part $3)$ for the three months ended March $31,$

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.

$5.$ Prepare a statement of retained earnings $($from the adjusted trial balance in part $3)$ for the three months ended March $31,2022.$

$6.$ Prepare a classified balance sheet $($from the adjusted trial balance$)$ as of March $31,2022$