Serial Problem Business Solutions LO P2, P3 The December 31, 2019, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2019) follows. 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. NO. Credit Debit $ 39,064 13,318 2,545 1,860 3,280 8,700 $ 0 21,600 101 106 126 128 131 163 164 167 168 201 210 236 301 302 403 612 613 623 637 640 652 655 676 677 684 Account Title Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-office equipment Computer equipment Accumulated depreciationComputer 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 0 0 0 66,000 6,100 36,239 01 OO 2,475 0 O O 0 1,708 674 180 735 $102,239 $102,239 Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $980 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $480 cash for minor repairs to the company's computer. 4 Received $4,950 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 $115 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,700 on a proposed project has been accepted. Alex's paid a $2,100 cash advance to Business Solutions. 15 Purchased $1,500 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 $5,675 cash. 22 Took the week off for the holidays. 26 28 Received $3,100 cash from Gomez Co. on its receivable. 29 Reimbursed s. Rey for business automobile mileage (500 miles at $0.29 per mile). 31 S. Rey withdrew $1,300 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 $660 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 $115 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, adjusting entries to the accounts in the ledger. 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 owner's equity for the three months ended December 31, 2019. 6. Prepare a balance sheet as of December 31, 2019. BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2019 Account Title Debit Credit Cash 51,360 Accounts receivable 5,268 Computer supplies 4,045 X 1,860 X Prepaid insurance Prepaid rent 3,280 X 8,700 435 Office equipment Accumulated depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Accounts payable 21,600 1,350 1,500 Wages payable 460 Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals 7,400 Computer services revenue 41,914 Depreciation expense-Office equipment 435 Depreciation expense-Computer equipment 1,350 Wages expense 3,165 X Insurance expense 465 Rent expense 2,460 3,385 Computer supplies expense Advertising expense 980 819 Mileage expense Miscellaneous expenses 180 Repairs expense-Computer 1,215 Totals $ 152,481 $ 11,145 BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2019 Revenue Expenses Total expenses 0 BUSINESS SOLUTIONS Statement of Owner's Equity For Three Months Ended December 31, 2019 S. Rey, Capital, October 1, 2019 0 S. Rey, Capital, December 31, 2019 0 BUSINESS SOLUTIONS Balance Sheet December 31, 2019 Assets 0 0 Total assets 0 Liabilities Total liabilities 0 Equity Total liabilities and equity