The Accounting Cycle Saved After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows. Credit Print Debit $ 38,964 12,818 2,545 1,920 3,100 8,400 23,600 168 No. 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 Accumulated depreciation-Computer equipment 201 Account Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-Office equipment Depreciation expense-Computer 613 equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals 66,000 5,900 37,014 2,550 1,648 634 210 725 $103,014 $103,014 Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $1,000 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $440 cash for minor repairs to the company's computer. 4 Received $4,350 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $125 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,000 on a proposed project has been accepted. Alex's paid a $2,400 cash advance to Business Solutions. 15 Purchased $1,900 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on Novembe 20 Completed a project for Liu Corporation and received $6,425 cash. 22- Took the week off for the holidays. 26 28 Received $3,100 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.25 per mile). 31 The company paid $1,000 cash in 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 $650 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 and events for Business Solutions. 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, 2019. 4. Prepare an income statement for the three months ended December 31, 2019 5. Prepare a statement of retained earnings for the three months ended December 31, 2019 6. Prepare a balance sheet as of December 31, 2019. 7. Record and post the necessary closing entries as of December 31, 2019. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 101: Cash Debit 106: Accounts Receivable Debit Credit Credit Balance 12.818 Date Dec. 01 Dec. 04 Dec. 28 1,000 440 4.350 .100 8.468 5.368 3 4,350 Date Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 10 Dec. 14 Dec. 20 Dec. 28 Dec. 29 Dec. 31 750 Balance 38,984 37,084 37,524 41,874 41,124 43,524 49,949 53,049 52,924 51,924 2,400 6,425 3,100 126: Computer Supplies Debit Credit 128: Prepaid Insurance Debit Credit Balance Date Dec. 01 Dec. 15 Balance 2,545 4,445 Date Dec. 01 1,900 131: Prepaid Rent Debit Credit 163: Office Equipment Debit Credit Date Dec. 01 Balance 3,100 Date Dec 01 Balance 8.400 164: Accumulated Depreciation Office Equipment 167: Computer Equipment 168: Accumulated Depreciation Computer Equipment Date Debit Credit Balance Dec. 01 201: Accounts Payable Debit Credit Balance Date Dec. 01 Dec. 15 1.900 1,900 210: Wages Payable Debit Credit Balance Date Dec. 01 Dec. 31 236: Unearned Computer Services Revenue Date Debit Credit Balance Dec. 01 Dec. 14 2.400 2.400 500 500 307: Common Stock Debit Credit 318: Retained Earnings Debit Credit Balance Date Dec. 01 Balance 66,000 Date Dec. 01 319: Dividends Debit Credit 403: Computer Services Revenue Debit Credit Date Dec. 01 Dec. 31 Balance 5,900 6,900 Date Dec. 01 Dec. 20 Balance 37.014 43.439 43.439 1 ,000 * 8.425 612: Depreciation Expense-Office Equipment Date Debit Credit Balance Dec. 01 613: Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 623: Wages Expense Debit Credit 637: Insurance Expense Debit Credit Balance Date Dec. 01 Dec. 10 Date Dec. 01 Balance 2,550 3,300 3,300 7 50 3.300 640: Rent Expense Debit Credit 652: Computer Supplies Expense Debit Credit Balance Balance Date Dec. 01 Date Dec. 01 0 655: Advertising Expense Debit Credit 676: Mileage Expense Debit Credit Balance Date Dec. 01 Dec. 02 Balance 1,848 2,648 Date Dec. 01 Dec. 29 1,000 677: Miscellaneous Expense Debit Credit 684: Repairs Expense-Computer Debit Credit Balance Date Dec. 01 Balance 210 Date Dec. 01 Dec. 03 725 440 1.165 901: Income Summary Debit Credit Date Balance Credit Debit 51.924 5.368 4.445 1.920 3,100 8.400 23,600 1.475 1,900 500 Adjusted Trial Balance December 31, 2019 Account Title Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Acoumulated depreciation Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense_Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense_Computer 2,400 66,000 6.900 43,439 420 1,475 3,300 480 775 3.795 2.648 750 210 1,185 | Req1 Reg 1 Req ZA REG 2B Req3 Reg 4 Rega Req5 Rego Reg 6 Req? Req8 Prepare a statement of retained earnings for the three months ended December 31, 2019. BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended December 31, 2019 Retained earnings, October 1, 2019 Retained earnings. December 31, 2019 $ 0