Serial Problem Business Solutions LO P1, P2, P3 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2017, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2017) follows. Credit Debit $ 38,264 12,618 2,545 2,220 3,300 8,000 20,000 No. Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 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 S. Rey, Capital 302 S. Rey, Withdrawals 403 Computer services revenue 612 Depreciation expense-Office equipment 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 Totals 73,000 5,600 25,659 OOOOO 1,728 704 250 805 $ 98,659 $98,659 Business Solutions had the following transactions and events in December 2017. Dec. 2 Paid $1,025 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $500 cash for minor repairs to the company's computer. 4 Received $3,950 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $125 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Business Solutions. 15 Purchased $1,100 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 20 Completed a project for Liu Corporation and received $5,625 cash. 22-26 Took the week off for the holidays. 28 Received $3,000 cash from Gomez Co. on its receivable. 29 Reimbursed s. Rey for business automobile mileage (600 miles at $0.32 per mile). 31 s. Rey withdrew $1,500 cash from the company for personal use. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months: a. The December 31 inventory count of computer supplies shows $580 still available. b. Three months have expired since the 12-month insurance premium was paid in advance. C. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day. d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent has expired. Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2017. 4. Prepare an income statement for the three months ended December 31, 2017 5. Prepare a statement of owner's equity for the three months ended December 31, 2017 6. Prepare a balance sheet as of December 31, 2017 Reg 1 Req 2A Req 2B Reg 3 Req 4 Reg 5 Req 6 Prepare adjusting entries to reflect a through f. View transaction list View journal entry worksheet Credit No 1 Transaction a. General Journal Computer supplies expense Computer supplies Debit 3,065 3,065 2b. Insurance expense 2,200 Prepaid insurance 2,200 Wages expense Wages payable Depreciation expense Computer equipment Accumulated depreciation Computer equipment Depreciation expense-Office equipment Accumulated depreciation Office equipment Rent expense Prepaid rent Req1 Req 2B > Cash Accounts Receivable Debit Credit Debit Credit Date Dec. 01 Dec. 04 Dec. 28 Balance 12,618 16,568 19,568 1,025 500 3,950 3,000 3,950 Date Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 10 Dec. 14 Dec. 20 Dec. 28 Dec. 29 Dec. 31 Balance 38,264 37,239 36,739 40,689 40,564 42,064 47,689 50,689 125 1,500 5,625 3,000 1,500 49,189 Computer Supplies Debit Credit Prepaid Insurance Debit Credit Balance 2,545 3,645 Date Dec. 01 Date Dec. 01 Dec. 15 Dec. 31 Balance 2,220 1,100 Dec. 31 Computer Supplies Debit Credit Prepaid Insurance Debit Credit Balance Date Dec. 01 Balance 2,220 2,545 Date Dec. 01 Dec. 15 Dec. 31 1 ,100 3,645 Dec. 31 Prepaid Rent Debit Credit Office Equipment Debit Credit Date Dec. 01 Dec. 31 Balance 3,300 Date Dec. 01 Balance 8,000 Computer Equipment Debit Credit Accumulated Depreciation-Office Equipment Date Debit Credit Balance Dec. 01 Dec. 31 Date Dec. 01 Balance 20,000 Accounts Payable Debit Credit Balance Accumulated Depreciation Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 Date Dec. 01 Dec. 15 1,100 1.100 Wages Payable Debit Credit Unearned Computer Services Revenue Debit Credit Balance Balance Date Dec. 01 Dec. 31 Date Dec. 01 Dec. 14 1,500 1,500 S. Rey, Capital Debit Credit S. Rey, Withdrawals Debit Credit Balance Date Dec. 01 Balance 73,000 Date Dec. 01 5,600 Computer Services Revenue Debit Credit Balance 25,659 Date Dec. 01 Dec. 31 Dec. 31 Depreciation Expense-Office Equipment Date Debit Credit Balance Dec. 01 Dec. 10 125 125 Dec. 31 Wages Expense Debit Credit Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Balance 2,625 0 Insurance Expense Debit Credit Rent Expense Debit Credit Balance Balance Date Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Dec. 31 Dec. 31 r r Computer Supplies Expense Debit Credit Advertising Expense Debit Credit Balance Date Dec. 01 Date Dec. 01 Dec. 02 Balance 1,728 2,753 Dec. 31 1,025 Dec. 31 Dec. 310 Mileage Expense Debit Credit Miscellaneous Expenses Debit Credit Balance 704 Date Dec. 01 Dec. 29 Dec. 31 Date Dec. 01 Dec. 31 Balance 250 Repairs Expense - Computer Debit Credit Balance 805 Date Dec. 01 Dec. 03 Dec. 31 500 1,305 BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2017 Account Title Debit Credit Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals Computer services revenue Depreciation expense-Office equipment Depreciation expense Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense Computer Totals 0 $ Reg 1 Reg 2A Rec 2B Reg 3 Reg 3 Reg 4 Re4 Reg 5 Reg 5 Reg 6 Reg 6 Prepare a statement of owner's equity for the three months ended December 31, 2017 BUSINESS SOLUTIONS Statement of Owner's Equity For Three Months Ended December 31, 2017 S. Rey, Capital, October 1, 2017 Add: Net income Less: Withdrawals S. Rey, Capital, December 31, 2017 BUSINESS SOLUTIONS Balance Sheet December 31, 2017 Assets Cash 38,264 12,616 2,545 2,229 3,300 $ 8,000 8,000 Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equipment Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity 20,000 0 20,000 86,954 0 Total Liabilities and Equity