Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Serial Problem Business Solutions LO P1, P2, P3, P4, P5, P6 After the success of the companys first two months, Santana Rey continues to operate

Serial Problem Business Solutions LO P1, P2, P3, P4, P5, P6

After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows.

No. Account Title Debit Credit
101 Cash $ 38,264
106 Accounts receivable 12,618
126 Computer supplies 2,545
128 Prepaid insurance 2,220
131 Prepaid rent 3,300
163 Office equipment 8,000
164 Accumulated depreciationOffice equipment $ 0
167 Computer equipment 20,000
168 Accumulated depreciationComputer equipment 0
201 Accounts payable 0
210 Wages payable 0
236 Unearned computer services revenue 0
307 Common stock 73,000
318 Retained earnings 0
319 Dividends 5,600
403 Computer services revenue 25,659
612 Depreciation expenseOffice equipment 0
613 Depreciation expenseComputer equipment 0
623 Wages expense 2,625
637 Insurance expense 0
640 Rent expense 0
652 Computer supplies expense 0
655 Advertising expense 1,728
676 Mileage expense 704
677 Miscellaneous expenses 250
684 Repairs expenseComputer 805
Totals $ 98,659 $ 98,659

Business Solutions had the following transactions and events in December 2019.

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 companys computer.
4 Received $3,950 cash from Alexs 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 Alexs Engineering Co. that Business Solutions bid of $7,000 on a proposed project has been accepted. Alexs 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.
2226 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 The company paid $1,500 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months.

  1. The December 31 inventory count of computer supplies shows $580 still available.
  2. Three months have expired since the 12-month insurance premium was paid in advance.
  3. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day.
  4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
  5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
  6. Three of the four months' prepaid rent have 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 from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts. 3. Prepare an adjusted trial balance as of December 31, 2019. 4. Prepare an income statement for the three months ended December 31, 2019. 5. Prepare a statement of retained earnings for the three months ended December 31, 2019. 6. Prepare a balance sheet as of December 31, 2019. 7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B. 8. Prepare a post-closing trial balance as of December 31, 2019.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Post the journal entries to record each of the December transactions from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts. 101: Cash Debit 106: Accounts Receivable Debit Credit Date Credit Balance Date Balance Dec 01 38,264 Dec. 01 12,618 126: Computer Supplies Debit Credit 128: Prepaid Insurance Debit Credit Date Date Balance 2,545 Balance 2,220 Dec 01 Dec. 01 131: Prepaid Rent Debit Credit 163: Office Equipment Debit Credit Date Date Balance 3,300 Balance 8,000 Dec. 01 Dec. 01 164: Accumulated DepreciationOffice Equipment Date Debit Credit Balance 167: Computer Equipment Debit Credit Date Dec. 01 Balance 20,000 Dec. 01 0 168: Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Dec 01 201: Accounts Payable Debit Credit Date Balance 0 Dec. 01 0 210: Wages Payable Debit Credit Date Balance 236: Unearned Computer Services Revenue Date Debit Credit Balance Dec. 01 Dec. 01 0 0 307: Common Stock Debit Credit 318: Retained Earnings Debit Credit Date Balance Balance Date Dec. 01 Dec. 01 73,000 0 319: Dividends Debit Credit 403: Computer Services Revenue Debit Credit Date Date Balance 5,600 Balance 25,659 Dec. 01 Dec. 01 612: Depreciation Expense-Office Equipment Date Debit Credit Balance 613: Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 01 0 0 623: Wages Expense Debit Credit 637: Insurance Expense Debit Credit Date Balance Date Balance Dec 01 2,625 Dec. 01 0 623: Wages Expense Debit Credit 637: Insurance Expense Debit Credit Date Balance Date Balance Dec 01 2,625 Dec. 01 0 640: Rent Expense Debit Credit 652: Computer Supplies Expense Debit Credit Date Balance Balance Dec. 01 Date Dec. 01 0 0 655: Advertising Expense Debit Credit 676: Mileage Expense Debit Credit Date Balance 1,728 Date Dec. 01 Balance 704 Dec 01 677: Miscellaneous Expense 684: Repairs Expense Computer 677: Miscellaneous Expense Debit Credit 684: Repairs Expense-Computer Debit Credit Date Balance Date Balance Dec. 01 250 Dec. 01 805 901: Income Summary Debit Credit Date Balance Req 2A Req3 >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: John Hoggett, Lew Edwards, John Medlin, Keryn Chalmers, Jodie Maxfield, Andreas Hellmann, Claire Beattie

9th Edition

1118608208, 978-1118608203

More Books

Students also viewed these Accounting questions

Question

Write the numeral as an Ionic Greek numeral. 5005

Answered: 1 week ago

Question

600 lb 20 0.5 ft 30 30 5 ft

Answered: 1 week ago

Question

Identify traditional external recruitment methods.

Answered: 1 week ago

Question

Describe alternatives to recruitment.

Answered: 1 week ago