Serial Problem Business Solutions LO P1, P2, P3, P4, P5, P6 After the success of the company's 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. Credit Debit $ 38,264 12,618 2,545 2,220 3,300 8,000 $ 0 20,000 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 Account Title 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 Common stock Retained earnings Dividends 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 0 0 0 73,000 0 5,600 25,659 0 0 2,625 0 0 0 1,728 704 250 805 $ 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 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 proj 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. 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 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 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. Journal entry worksheet 2 4 > 5 6 The December 31 inventory count of computer supplies shows $580 still available. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Journal entry worksheet 1 2 3 4 5 6 > As of December 31, Lyn Addie has not been paid for four days of work at $125 per day. Note: Enter debits before credits. Transaction General Journal Debit Credit C. Journal entry worksheet 1 2 3 4 5 > The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. Note: Enter debits before credits. Transaction General Journal Debit Credit d. 101: Cash 106: Accounts Receivable Date Debit Credit Balance Date Debit Credit Balance Dec. 01 38,264 Dec. 01 12,618 126: Computer Supplies 128: Prepaid Insurance Date Debit Credit Balance Date Debit Credit Balance Dec. 01 2,545 Dec. 01 2,220 131: Prepaid Rent Debit Credit 163: Office Equipment Debit Credit Date Date Balance Balance 3,300 Dec. 01 Dec. 01 8,000 164: Accumulated Depreciation Office Equipment Date Debit Credit Balance Dec. 01 167: Computer Equipment Debit Credit Date Balance 0 Dec. 01 20,000 168: 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 318: Retained Earnings Debit Credit Date Debit Credit Balance Date Balance Dec. 01 73,000 Dec. 01 0 319: Dividends 403: Computer Services Revenue Debit Credit Date Debit Credit Balance Date Balance Dec. 01 5,600 Dec. 01 25,659 > 612: Depreciation Expense-Office Equipment Date Debit Credit Balance 613: Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 0 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 Date Balance Dec. 01 0 Dec. 01 0 676: Mileage Expense 655: Advertising Expense Debit Credit Date Balance Date Debit Credit Balance Dec. 01 1,728 Dec. 01 704 677: Miscellaneous Expense 684: Repairs Expense-Computer Debit Credit Date Debit Credit Balance Date Balance Dec. 01 250 Dec. 01 805 901: Income Summary Date Debit Credit Balance BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2019 Account Title Debit Credit Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends 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 expenseComputer Totals $ 0 $ 0 BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2019 Revenue Expenses Total expenses O BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended December 31, 2019 Retained earnings, October 1, 2019 0 Retained earnings, December 31, 2019 $ 0 BUSINESS SOLUTIONS Balance Sheet December 31, 2019 Assets 0 0 Total Assets 0 Liabilities Total Liabilities 0 Equity 0 Total equity Total Liabilities and Equity $ 0 Journal entry worksheet Close the revenue account(s). Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Journal entry worksheet Close the expense accounts. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Journal entry worksheet Close the Income summary account. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Journal entry worksheet Close the Dividends account. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2019 Debit Credit Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Totals $ 0 $ 0