Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

After the success of the companys 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.

No. Account Title Debit Credit
101 Cash $ 39,164
106 Accounts receivable 13,518
126 Computer supplies 2,545
128 Prepaid insurance 2,100
131 Prepaid rent 3,240
163 Office equipment 8,200
164 Accumulated depreciationOffice equipment $ 0
167 Computer equipment 23,200
168 Accumulated depreciationComputer equipment 0
201 Accounts payable 0
210 Wages payable 0
236 Unearned computer services revenue 0
307 Common stock 65,000
318 Retained earnings 0
319 Dividends 6,400
403 Computer services revenue 39,314
612 Depreciation expenseOffice equipment 0
613 Depreciation expenseComputer equipment 0
623 Wages expense 2,600
637 Insurance expense 0
640 Rent expense 0
652 Computer supplies expense 0
655 Advertising expense 1,728
676 Mileage expense 624
677 Miscellaneous expenses 200
684 Repairs expenseComputer 795
Totals $ 104,314 $ 104,314

Business Solutions had the following transactions and events in December 2017.

Dec. 2 Paid $995 cash to Hillside Mall for Business Solutions share of mall advertising costs.
3 Paid $450 cash for minor repairs to the companys computer.
4 Received $4,250 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 $100 per day.
14 Notified by Alexs Engineering Co. that Business Solutions bid of $7,400 on a proposed project has been accepted. Alexs paid a $1,800 cash advance to Business Solutions.
15 Purchased $1,600 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 $6,625 cash.
2226 Took the week off for the holidays.
28 Received $3,900 cash from Gomez Co. on its receivable.
29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.27 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:

The December 31 inventory count of computer supplies shows $670 still available.

Three months have expired since the 12-month insurance premium was paid in advance.

As of December 31, Lyn Addie has not been paid for four days of work at $100 per day.

The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.

The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.

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 retained earnings for the three months ended December 31, 2017. 6. Prepare a balance sheet as of December 31, 2017. 7. Record and post the necessary closing entries as of December 31, 2017. 8. Prepare a post-closing trial balance as of December 31, 2017.

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

Step: 3

blur-text-image

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 Longman Modular Texts In Business And Economics

Authors: Christopher Waterston, Anne Britton

2nd Edition

058238169X, 978-0582381698

More Books

Students also viewed these Accounting questions