SP 4 Serial Problem Business Solutions (Algo) LO P1, P2, P3, P4 [The following information applies to the questions displayed below) Santana Rey created Business Solutions on October 1, 2021. 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 number used for each account and any balance as of December 31, 2021. Santana 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. Credit Debit $ 48,502 OOO 3,080 0 2,778 0 0 0 0 670 1,854 925 8,190 $ 350 20,300 Number 101 106.1 106.2 106.3 106.4 106.5 106.6 106.7 106.8 106.9 119 126 128 131 163 164 167 168 201 210 236 301 318 319 403 413 414 415 502 612 613 623 637 640 652 655 676 677 684 Account Title Cash Alex's Engineering Company Wildcat Services Easy Leasing IFM Company Liu Corporation Gomez Company Delta Company KC, Incorporated Dream, Incorporated Merchandise inventory Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Comon stock Retained earnings Dividends Computer services revenue Sales Sales returns and allowances Sales discounts Cost of goods sold Depreciation expense-office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileago expense Miscellaneous expenses Repairs expense-Computer 1,160 1,230 540 1,470 73,389 8,160 0 0 0 0 0 0 0 0 0 0 0 0 In response to requests from customers, S. Rey will be of 1/10,n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Numbers. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow. January 4 The company paid cash to Lyn Addie for five days' work at the rate of $135 per day. Four of the five days relate to wages payable that were accrued in the prior year. January 5 Santana Roy invested an additional $24,700 cash in the company in exchange for more common stock. January 7 The company purchased $6,700 of merchandise from Kanvas Corporation with terms f 1/10, n/30, POB shipping point, invoice dated January 7. January 9 The company received $2,778 cash from Gomez Company as full payment on its account. January 11 The company completed a five-day project for Alex's Engineering Company and billed it $5,480, which is the total price of $6,950 less the advance payment of $1,470. The company debited Unearned Computer Services Revenue for $1,470. January 13 The company sold merchandise with a retail value of $5,000 and a cost of $3,520 to Liu Corporation, invoice dated January 13. January 15 The company paid 5630 cash for freight charges on the merchandise purchased on January 7. January 16 The company receved $4,130 cash from Delta Company for computer services provided. January 17 The company paid Kansas Corporation for the invoice dated January 7, net of the discount. January 20 The company gave a price reduction (allowance) $600 to Liu Corporation and credited Liu's accounts receivable for that amount. January 22 The company received the balance due from Lu Corporation, net of the discount and the allowance. January 24 The company returned defective merchandise to Kansas Corporation and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cont, net of the discount, was $486. January 26 The company purchased $9,200 of merchandise from Kansas corporation with terms of 1/10, n/30, POB destination, Invoice dated January 26. January 26 The company sold merchandise with a $4,550 cost for $5,010 on credit to ko, Incorporated, invoice dated January 26. January 31 The company paid cash to Lyn Addie for 10 days' work at $135 per day. February 1 The company paid $2,775 cash to Hillside Mall for another three months' rent in advance. Yebruary 3 The company paid Kansas Corporation for the balance due, net of the cash discount, less the $486 credit from merchandise returned on January 24. February 5 The company paid $580 canh to Facebook for an advertisement to appear on February 5 only. February 11 The company received the balance duo from Alex'a Engineering Company for teen billed on January 11. Pebruary 15 The company paid a $4,780 cash dividend. February 23 The company sold merchandise with a $2,520 cost for $3,340 on credit to Delta Company, invoice dated February 23. February 26 The company paid cash to Lyn Addie for eight days' work at $135 per day. Yebruary 27 The company reimbursed Santana Roy $320 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Ixpense." March the company purchased $2,010 of computer supplies from Harris office Products on credit with HA ARMA dated January 26. January 31 The company paid cash to Lyn Addie for 10 days work at $135 per day. February 1 The company paid $2,775 cash to Hillside Mall for another three months rent in advance. February 3 The company paid Kansas Corporation for the balance due, net of the cash discount, less the $486 credit from merchandise returned on January 24. February 5 The company paid $580 cash to Facebook for an advertisement to appear on February 5 only. February 11 The company received the balance due from Alex's Engineering Company for fees billed on January 11. February 15 The company paid a $4,780 cash dividend. February 23 The company sold merchandise with a $2,520 cost for $3,340 on credit to Delta Company, invoice dated February 23. February 26 The company paid cash to Lyn Addie for eight days' work at $135 per day. February 27 The company reimbursed Santana Roy $320 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense. March 8 The company purchased $2,810 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. March 9 The company received the balance due from Delta Company for merchandise sold on February 23. March 11 The company paid $800 cash for minor repairs to the company's computer. March 16 The company received $5,460 cash from Dream, Incorporated, for computing services provided. rch 19 The company paio che full amount due of $4,040 to Harris Office Products, consisting of amounts created on December 15 (of $1,230) and March 8. March 24 The company billed Easy Leasing for $9,187 of computing services provided. March 25 The company sold merchandise with a $2,182 cost for $2,840 on credit to Wildcat Services, invoice dated March 25. March 30 The company sold merchandise with a $1,138 cost for $2,350 on credit to IFM Company, invoice dated March 30. March 31 The company reimbursed Santana Rey $224 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 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 $2,185. b. Prepaid Insurance coverage of $618 expired during this three-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $135 per day. d. Prepaid rent of $2,775 expired during this three month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1160. f. Depreciation on the office equipment for January 1 through March 31 is $350. g. The March 31 amount of merchandise Inventory still available totals $584. 5. Prepare a statement of retained earnings (from the adjusted trial balance in part 3) for the three months ended March 31, 2022 BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended March 31, 2022 Retained earnings, December 31, 2021 $ Add: Not income 8,160 8,160 Loos: Dividends Retained earnings, March 31, 2022 $ 8,160