SP 3 Serial Problem Business Solutions (Algo) LO P1, P2, P3, P4, P5 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 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 613 623 Wages expense 637 640 Rent expense 652 Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer 901 Income summary Totals Debit $ 38,564 Credit 13,218 2,645 2,100 3,100 8,300 $ 0 22,800 0 0 0 0 67,000 0 6,300 35,879 0 0 2,575 0 0 1,658 644 190 785 0 $ 102,879 $ 102,879 Business Solutions had the following transactions and events in December 2021. December 2 Paid $950 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 $4,850 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 $120 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 $1,800 cash advance to Business Solutions. December 15 Purchased $1,200 of computer supplies on credit from Harris Office Products. December 3 Paid $480 cash for minor repairs to the company's computer. December 4 Received $4,850 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 $120 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 $1,800 cash advance to Business Solutions. December 15 Purchased $1,200 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 $6,525 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,900 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (400 miles at $0.23 per mile). December 31 Paid $1,300 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. 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 $120 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. 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. Record the necessary closing entries as of December 31, 2021. 8. Prepare a post-closing trial balance as of December 31, 2021. Date December 01 Date December 01 Date December 01 101: Cash 106: Accounts Receivable Debit Credit Balance Date Debit Credit Balance 38,564 December 01 13,218 126: Computer Supplies Debit 128: Prepaid Insurance Credit Balance 2,645 Date December 01 Debit Credit Balance 2,100 131: Prepaid Rent Debit Credit Balance Date 3,100 December 01 164: Accumulated Depreciation-Office Equipment Date December 01 Debit Credit Balance 0 Date December 01 163: Office Equipment Debit Credit Balance 8,300 167: Computer Equipment Debit Credit Balance 22,800 168: Accumulated Depreciation-Computer Equipment Date December 01 Date December 01 Date December 01 Debit Credit 210: Wages Payable Debit Balance Date 0 December 01 Credit Balance Date 0 December 01 307: Common Stock Debit Date December 01 319: Dividends Debit 201: Accounts Payable Debit Credit Balance 0 236: Unearned Computer Services Revenue Debit Credit Balance 0 318: Retained Earnings Credit Balance Date Debit Credit Balance 67,000 December 01 0 Credit Balance 6,300 Date December 01 612: Depreciation Expense-Office Equipment Date December 01 Debit Credit 403: Computer Services Revenue Debit Credit Balance 35,879 613: Depreciation Expense-Computer Equipment Balance 0 Date December 01 Debit < Prev 1 of 5 Next > Credit Balance 0 Date December 01 Date December 01 Date December 01 623: Wages Expense Debit Credit Balance Date 2,575 December 01 640: Rent Expense Debit Credit Balance Date 0 December 01 655: Advertising Expense Debit 637: Insurance Expense Debit Credit Balance 0 652: Computer Supplies Expense Debit Credit Balance 0 676: Mileage Expense Credit Balance Date Debit Credit Balance 1,658 December 01 644 Date December 01 677: Miscellaneous Expense Debit Credit Balance Date 190 December 01 684: Repairs Expense-Computer Debit Credit Balance 785