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. Business Solutions had the following transactions and events in December 2021. December 2 Paid $1,010 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 2 Paid $1,010 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $450 cash for minor repairs to the company's computer. December 4 Received $4,450 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 $125 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,300 on a proposed project been accepted. Alex's paid a $2,200 cash advance to Business Solutions. December 15 Purchased $1,800 of computer supplies on credit from Harris 0ffice 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 \$6,475 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 (500 miles at $0.28 per mile). December 31 Paid $1,200 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 $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 \$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. 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. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ 101: Cash } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 38,764 \\ \hline December 02 & & 1,010 & 37,754 \\ \hline December 03 & & 450 & 37,304 \\ \hline December 04 & 4,450 & & 41,754 \\ \hline December 10 & & 750 & 41,004 \\ \hline December 14 & 2,200 & & 43,204 \\ \hline December 20 & 6,475 & & 49,679 \\ \hline December 28 & 3,900 & & 53,579 \\ \hline December 29 & & 140 & 53,439 \\ \hline December 31 & & 1,200 & 52,239 \\ \hline & & & \\ \hline \multicolumn{4}{|c|}{ 126: Computer Supplies } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 2,545 \\ \hline December 15 & 1,800 & & 4,345 \\ \hline r & & & \\ \hline & & & \\ \hline \multicolumn{4}{|c|}{ 131: Prepaid Rent } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 3,160 \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ 319: Dividends } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 5,900 \\ \hline & & & \\ \hline & & & \\ \hline 7 & & & \\ \hline \multicolumn{4}{|c|}{ 612: Depreciation Expense-Office Equipment } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 0 \\ \hline December 31 & 1,200 & & 1,200 \\ \hline & & & \\ \hline 7 & & & \\ \hline \multicolumn{4}{|c|}{ 623: Wages Expense } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 2,300 \\ \hlineP & & & \\ \hlinep & & & \\ \hline 7 & & & \\ \hline 7 & & & \\ \hline \multicolumn{4}{|c|}{ 640: Rent Expense } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 0 \\ \hline 7 & & & \\ \hline 7 & & & \\ \hline> & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ 403: Computer Services Revenue } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 34,744 \\ \hline December 20 & & 6,475 & 41,219 \\ \hline r & & & \\ \hline 7 & & & \\ \hline \multicolumn{4}{|c|}{ 613: Depreciation Expense-Computer Equipment } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 0 \\ \hline 7 & & & \\ \hline & & & \\ \hline & & & \\ \hline \multicolumn{4}{|c|}{ 637: Insurance Expense } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 0 \\ \hline 7 & & & \\ \hline 7 & & & \\ \hline & & & \\ \hline \multicolumn{4}{|c|}{ 652: Computer Supplies Expense } \\ \hline Date & Debit & Credit & Balance \\ \hline December 01 & & & 0 \\ \hline 7 & & & \\ \hline 7 & & & \\ \hline 7 & & & \\ \hline \end{tabular} Required 2A Required 3 Prepare an adjusted trial balance as of December 31, 2021. \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ BUSINESS SOLUTIONS } \\ \hline \multicolumn{3}{|c|}{ Adjusted Trial Balance } \\ \hline \multicolumn{3}{|c|}{ December 31, 2021} \\ \hline Account Title & Debit & Credit \\ \hline Cash & 52,239 & \\ \hline Accounts receivable & 4,968 & \\ \hline Computer supplies & 4,345 & \\ \hline Prepaid insurance & 1,980 & \\ \hline Prepaid rent & 3,160 & \\ \hline Office equipment & 8,300 & \\ \hline \multicolumn{3}{|l|}{ Accumulated depreciation-Office equipment } \\ \hline Computer equipment & 23,200 & \\ \hline \multicolumn{3}{|l|}{ Accumulated depreciation-Computer equipment } \\ \hline Accounts payable & & 1,800 \\ \hline Wages payable & 750 & \\ \hline Unearned computer services revenue & & 2,200 \\ \hline Common stock & 6,800 & \\ \hline \multicolumn{3}{|l|}{ Retained earnings } \\ \hline Dividends & 5,900 & \\ \hline Computer services revenue & & 6,475 \\ \hline Depreciation expense-Office equipment & 1,200 & \\ \hline \multicolumn{3}{|l|}{ Depreciation expense-Computer equipment } \\ \hline Wanes exnense & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline Prepaid rent & 3,160 & \\ \hline Office equipment & 8,300 & \\ \hline \multicolumn{3}{|l|}{ Accumulated depreciationOffice equipment } \\ \hline Computer equipment & 23,200 & \\ \hline \multicolumn{3}{|c|}{ Accumulated depreciation-Computer equipment } \\ \hline Accounts payable & & 1,800 \\ \hline Wages payable & 750 & \\ \hline Unearned computer services revenue & & 2,200 \\ \hline Common stock & 6,800 & \\ \hline \multicolumn{3}{|l|}{ Retained earnings } \\ \hline Dividends & 5,900 & \\ \hline Computer services revenue & & 6,475 \\ \hline Depreciation expense-Office equipment & 1,200 & \\ \hline \multicolumn{3}{|l|}{ Depreciation expense-Computer equipment } \\ \hline Wages expense & 2,300 & \\ \hline Insurance expense & & 495 \\ \hline \multicolumn{3}{|l|}{ Rent expense } \\ \hline \multicolumn{3}{|l|}{ Computer supplies expense } \\ \hline Advertising expense & 2,688 & \\ \hline Mileage expense & 834 & \\ \hline Miscellaneous expenses & 220 & \\ \hline Repairs expense-Computer & 1,155 & \\ \hline Totals & 120,039 & 10,970 \\ \hline \end{tabular} Required 2B Required 4