SERIAL PROBLEM The serial problem begon Chapter and continet through most of the book 1 previous Chapter were completed the serial problem can be at this point. SP 5 Business Solutions P1 P2 P3 P4 S. Rey created Business Solutions on October 1, 2011. The company has been successful, and its List of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account nom. berused for each account and any balances December 31, 2011. S. Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts Dr. Cr. $4372 0 3.000 0 2468 0 0 . 580 1655 825 8.000 $ 400 Na Account Tide TO Gish 104 Aspeco 1062 Wat Services 106) Emy Lee 106.4 ITM Co 106 Corp 1066 Gone Co 1067 Del Co 1053 KC Inc 106 Dreme 1119 Merchandise 126 Computer supplies 125 Prepaid Insurance Prepaid rent 163 Office omene 164 Accumulated depreciation Ofice equipment 167 Computer equipment 168 Accumulated depreciation-Computer coment 201 Arcounts payable 210 Wages payable 235 Uneamed computer services revenue 301 Share capital 311 Retained earning 312 Dividends 403 Computer services revenue 413 Sales Sales returns and lowance 415 Sales discounts 502 Cost of goods sold 612 Depreciation expenOffice equipment 613 Depreciation expense Comment Wapet pense Insurance expense 20.000 1.250 1.100 500 1.500 73.000 7.360 O 637 o o o o o o o o o o o o 652 ESS 476 677 Computer les experts Adren Mi expense recomputer 0 Chapter 5 Merchandong Operation 225 11 00 In response to requests from customers. S. Rey will begin selling computer software. The company will extend credit terms of 1/10./30. FOB shipping point to all customers who purchase this merchandise However, no cash discount is available on consulting fees Additional accounts (No. 119. 413,414 415 and 502) are added to its general ledger to accommodate the company's new merchandising activities. Also, Business Solutions does not use reversing entries and therefore, all revert and expense accounts have rere beginning balances 23 January 1, 2012. Its transactions for January through March follow Jan 4 The company paid cash to Lyn Addie for five days' work at the rate of 5125 per day. Four of the five days relate to wages payable that were accrued in the prior your 5 S. Rey received shares from mesting 525.000 in the corpo 7 The company purchased 55.800 of merchandise from Kansas Corp with terms of 1/10. :/80 FOB shipping point, invoice dated January 9 The company received 52.665 cash from Gomez Co as full payment on to 11 The company completed a five-day project for Alex's Engineering Co and billed $5.500. Check which is the total price of $7.000 less the ce payment of $1.500 13 The company sold merchandise with retail value of 55,200 and a cost of 53360 to Liu Corp. invoice dated January 13 15 The company paid 5600 cash for freight charges on the merchandise purchased on January 7 16 The company received $4.000 cash from Delta Co. for computer services provided 17 The company paid Kansas Corp. for the invoice dated January 7.net of the discount 20 Liu Corp, returned 500 of defective merchandise from its invoice dated January 13. The Check returned merchandise wluch had a 5320 con, is discarded. (The policy of Business Solutions to 15 to leave the cost of defective products in cost of goods sold 22 The company received the balance de brom Liu Corp.net of both the discount and the credit for the returned merchandise 24 The company relumed defective merchandise to Kancs Corp. and accepted a creat past future purchases. The defective merchandise e col net of the discount, was 596 26 The company purchased 59.000 of merchandise from Kaos Corp with terms of l/10./30. POB destination invoice dated Juary 26, 26 The company sold merchandise with a $4.640 cost for 55.800 on credit to Kleemice duted January 26 29 The company received $496 credit memorandum from Kansas Copconcerning the merchan disc returned on January 24 31 The company paid casto Lys Addie for 10 days' work at $125 per day The company paid $2.475 cash to Hillside Mall for another three months in advance 3 The company paid Kansas Cop for the balance due set of the cash discount, less the $496 amount in the credit memorandum 5 The company paid $600 cash to the local newspaper for an advertising isen in today's paper. 11 The company received the balance due from Alex's Engineering Co for fees billed on Janary II 15 The company puid dividends of S4.800 23 The company sold merchandise with a 52.660 cool for 53.220 on credit to Delta Co. invoice dated February 23 26 The company puid cash to Lyn Addie for eight days work a $125 per day 27 The company reimbursed Santana Rey for business automobile milcoge (600 miles at 50.32 per mile) Mar. The company purchased $2,730 of computer supplies from Harris Office Products on credit invoice dated March 9 The company received the balance due from Delta Co for merchandise sold on February 23 11 The company paid 960 cash for minor repairs to the company's computer, 16 The company received 55.260 cash from Dream, Inc., for computing services provided 19 The company paid the fall amount due to Harris Office Products consisting of mount created on December 15 (of $1,100) and March 8. 24 The company billed Easy Leasing for $9.47 of computing services provided 25 The company sold merchandise with a $2.002 cost for $2.800 on credit to Wildcut Services moice dated March 24 30 The company sold merchandise with a $1.048 cost for $2.320 on credit to IFM Company. invoice dates March 30 1 The company reimbursed S. Rey for business automobile mileape 400 miles at 0:32 per mile) Feh 226 Chapter 5 Merchandising Operations The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation: a. The March 31 amount of computer supplies still available totals $2,005. b. Three more months have expired since the company purchased its annual insurance policy at a $2.220 cost for 12 months of coverage. c. Lyn Addie has not been paid for seven days of work at the rate of S125 per day. d. Three months have passed since any prepaid rent has been transferred to expense. The monthly rent expense is $825. e. Depreciation on the computer equipment for January 1 through March 31 is $1.250. f. Depreciation on the office equipment for January 1 through March 31 is $400. g. The March 31 amount of merchandise inventory still available totals $704. Check (2) Ending balances at March 31. Cash, SOB.057 Sales, $19.240 3) Uned tools, 5161,557, Adi total $154,082 Required 1. Prepare journal entries to record each of the January through March transactions 2. Post the journal entries in part I to the accounts in the company's general ledger. (Note: Begin with the ledger's post-closing adjusted balances as at December 31, 2011.) 3. Prepare a partial work sheet consisting of the first six columns (similar to the one shown in Exhibit 5B.1) that includes the unadjusted trial balance, the March 31 adjustments (a) through (8) and the adjusted trial balance. Do not prepare closing entries and do not journalize the adjustments or post them to the ledger, 4. Prepare an income statement from the ndjusted trial balance in part 3) for the three months ended March 31, 2012 5. Prepare a statement of changes in equity from the adjusted trial balance in part 3) for the three months ended March 31, 2012 6. Prepare a classified statement of financial position (from the adjusted trial balance) as at March 31, 2012 4 Net income, $18.833 151 Total equity at March 31). $119,393: 16 Total assets. $120.268