SP $3$ Serial Problem Business Solutions $($Algo$)$ LO P$1,$ P$2,$ P$3,$ P$4,$ P$5$

After the success of the company$$s first two months, Santana Rey continues to operate Business Solutions. The November $30,2021,$ unadjusted trial balance of Business Solutions $($reflecting its transactions for October and November of $2021)$ follows.

Number Account Title Debit Credit

$101$ Cash $ $38,464$

$106$ Accounts receivable $13,018$

$126$ Computer supplies $2,645$

$128$ Prepaid insurance $2,100$

$131$ Prepaid rent $2,940$

$163$ Office equipment $8,600$

$164$ Accumulated depreciation$$Office equipment $ $0$

$167$ Computer equipment $22,400$

$168$ Accumulated depreciation$$Computer equipment $0$

$201$ Accounts payable $0$

$210$ Wages payable $0$

$236$ Unearned computer services revenue $0$

$307$ Common stock $71,000$

$318$ Retained earnings $0$

$319$ Dividends $5,800$

$403$ Computer services revenue $30,649$

$612$ Depreciation expense$$Office equipment $0$

$613$ Depreciation expense$$Computer equipment $0$

$623$ Wages expense $2,425$

$637$ Insurance expense $0$

$640$ Rent expense $0$

$652$ Computer supplies expense $0$

$655$ Advertising expense $1,678$

$676$ Mileage expense $604$

$677$ Miscellaneous expenses $200$

$684$ Repairs expense$$Computer $775$

$901$ Income summary $0$

Totals $ $101,649$ $ $101,649$

Business Solutions had the following transactions and events in December $2021.$

December $2$ Paid $$970$ cash to Hillside Mall for Business Solutions's share of mall advertising costs.

December $3$ Paid $$480$ cash for minor repairs to the company$$s computer.

December $4$ Received $$4,150$ cash from Alex$$s Engineering Company for the receivable from November.

December $10$ Paid cash to Lyn Addie for six days of work at the rate of $$100$ per day.

December $14$ Notified by Alex$$s Engineering Company that Business Solutions's bid of $$7,400$ on a proposed project has been accepted. Alex$$s paid a $$2,300$ cash advance to Business Solutions.

December $15$ Purchased $$1,100$ of computer supplies on credit from Harris Office Products.

December $16$ Sent a reminder to Gomez Company to pay the fee for services recorded on November $8.$

December $20$ Completed a project for Liu Corporation and received $$6,125$ cash.

December $22-26$ Took the week off for the holidays.

December $28$ Received $$3,300$ cash from Gomez Company on its receivable.

December $29$ Reimbursed S$.$ Rey for business automobile mileage $(500$ miles at $$0\mathrm{.}31$ per mile$).$

December $31$ Paid $$1,400$ cash for 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.

The December $31$ inventory count of computer supplies shows $$600$ 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 have expired.

Required:

$1.$ Prepare journal entries to record each of the December transactions. Post those entries to the accounts in the ledger.

$2-$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 $31,2021.$

$4.$ Prepare an income statement for the three months ended December $31,2021.$

$5.$ Prepare a statement of retained earnings for the three months ended December $31,2021.$

$6.$ Prepare a classified balance sheet as of December $31,2021.$

$7-$a$.$ Record the necessary closing entries as of December $31,2021.$

$7-$b$.$ Each closing entry is posted automatically to the general ledger. $($This is for reference only. No student work is required.$)$

$8.$ Prepare a post$-$closing trial balance as of December $31,2021.$

$101$: Cash $106$: Accounts Receivable

Date Debit Credit Balance Date Debit Credit Balance

December $0138,464$ December $0113,018$

December $0297037,494$ December $044,1508,868$

December $0348037,014$ December $283,3005,568$

December $044,15041,164$ December $31$

December $1010041,064$

December $142,30043,364$

December $206,12549,489$

December $283,30052,789$

December $2915552,634$

December $311,40051,234$

$126$: Computer Supplies $128$: Prepaid Insurance

Date Debit Credit Balance Date Debit Credit Balance

December $012,645$ December $012,100$

December $151,1003,745$ December $311,400700$

December $313,475270$

$131$: Prepaid Rent $163$: Office Equipment

Date Debit Credit Balance Date Debit Credit Balance

December $012,940$ December $018,600$

December $311,4001,540$ December $31$

$164$: Accumulated Depreciation$$Office Equipment $167$: Computer Equipment

Date Debit Credit Balance Date Debit Credit Balance

December $010$ December $0122,400$

$168$: Accumulated Depreciation$$Computer Equipment $201$: Accounts Payable

Date Debit Credit Balance Date