The following information applies to the questions displayed below.) Santana Rey created Business Solutions on October 1, 2019. 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, 2019. 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. Debit $ 48,372 Credit 3,000 2,668 580 1,665 825 8,000 $ 400 167 20,000 1,250 1.100 Account Title 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 106.5 Liu Corp. 106.6 Gomez Co. 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. 119 Merchandise inventory Computer supplies Prepaid insurance 131 Prepaid rent 163 office equipment Accumulated depreciation-office equipment Computer equipment Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock Retained earnings Dividends 403 Computer services revenue Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold Depreciation expense-office equipment 613 Depreciation expense Computer equipment 623 Wages expense 637 Insurance expense Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer 500 1,500 73,000 7,360 319 413 612 In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms 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 (Nos. 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: In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms 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 (Nos. 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: Jan. che prompany in exchange for more/30, POB shipping k at $125 per onths The company paid cash to Lyn Addie for five days' work at the rate of $125 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $25,000 cash in the company in exchange for more common stock. 7 The company purchased $5,800 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. 9 The company received $2,66B cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,500, which is the total price of $7,000 less the advance payment of $1,500. The company debited Unearned Computer Services Revenue for $1,500. 13 The company sold merchandise with a retail value of $5,200 and a cost of $3,560 to Liu Corp., invoice dated January 13. 15 The company paid $600 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,000 cash from Delta Co. for computer services provided. 17 The company paid Kansas Corp. for the invoice dated January 7, net of the discount. 20 The company gave a price reduction (allowance) of $500 to Liu Corp., and credited Liu's accounts receivable for that amount. 22 The company received the balance due from Liu Corp., net of the discount and the allowance. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount was $496. 26 The company purchased $9,000 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26. 26 The company sold merchandise with a $4,640 cost for $5,800 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days work at $125 per day. 1 The company paid $2,475 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $496 credit from merchandise returned on January 24. 5 The company paid $600 cash to Facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 The company paid a $4,800 cash dividend. 23 The company sold merchandise with a $2,660 cost for $3,220 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $125 per day. 27 The company reimbursed Santana Rey $192 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 8 The company purchased $2,730 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $960 cash for minor repairs to the company's computer. 16 The company received $5,260 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $3,830 to Harris Office Products, consisting of amounts created on December 15 of $1,100) and March 8. 24 The company billed Easy Leasing for $9,047 of computing services provided. 25 The company sold merchandise with a $2,002 cost for $2,800 on credit to wildcat Services, invoice dated March 25. 30 The company sold merchandise with a $1,048 cost for $2,220 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $128 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense. Feb. rent in the $496 credi Mar. 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 $2,005. b. Prepaid Insurance coverage of $555 expired during this three-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $125 per day. d. Prepaid rent of $2,475 expired during this three-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,250. f. Depreciation on the office equipment for January 1 through March 31 is $400. g. The March 31 amount of merchandise inventory still available totals $704. Mar 09 3,22 Cash Accounts receivable-Delta Co. T 3,220 29 Mar 11 GEO Repairs expense-Computer Cash GEO 30 Mar 16 5,260 W Cash Computer services revenue 5,260 Mar 19 3,830 L Accounts payable Cash 3,83.0 32 Mar 24 9,0M7 Accounts receivable-Easy Leasing Computer services revenue 9,07 Mar 25 2,000 W Accounts receivable-Wildcat Services Sales 2, BIOM 34 Mar 25 Cost of goods sold Merchandise inventory T 2,M2W 35 Mar 30 2,220 Accounts receivable IFM Co. Sales I 2,22 ) | 36 | Mar 30 1,0MB Cost of goods sold Merchandise inventory T 1,0MB 37 Mar 31 128 Mileage expense Cash T 12 14 Jan 26 9,000 Merchandise inventory Accounts payable 9,000 Jan 26 Accounts receivable-KC, Inc. Sales 5,800 5,800 Jan 26 4,640 Cost of goods sold Merchandise inventory 4.640 17 Jan 31 1.250 Wages expense Cash 1.250 18 Feb 01 2475 Prepaid rent Cash 2.475 19 Feb 03 8,504 Accounts payable Merchandise inventory Cash 90 8,414 Feb 05 Advertising expense Cash 600 21 Feb 11 5.500 Cash Accounts receivable-Alex's Engineering Co. 5,500 22 Feb 15 Dividends Cash so so so so so so so so so so so so so so so so so 4.800 23 Feb 23 Accounts receivable-Delta Co. Sales 3,220 24 Feb 23 2,660 Cost of goods sold Merchandise inventory 2,660 Feb 26 1,000 Wages expense Cash 1,000 Feb 27 192 Mileage expense Cash 192 27 Mar 08 2,730 Computer supplies Accounts payable 2,730 28 Mar 09 I Cash 3,220 Accounts receivable-Delta Co. 3,220 Mar 11 Repairs expense-Computer Cash 960 30 Mar 16 5,260 Cash Computer services revenue 5.260 1. Prepare journal entries to record each of the January through March transactions. Answer is complete and correct. No General Journal Credit Date Jan 04 Wages expense Wages payable Cash Debit 125 500 625 Jan 05 Cash Common stock 25,000 Jan 07 Merchandise inventory Accounts payable 5,800 Jan 09 2.668 Cash Accounts receivable-Gomez Co. 2,668 Jan 11 5.500 Accounts receivable-Alex's Engineering Co. Uneamed computer services revenue Computer services revenue 1,500 7.000 Jan 13 5.200 Accounts receivable Liu Corp. Sales OOOOOOOOOOOOOOOOOOOOOOOOOO 5,200 Jan 13 3,560 Cost of goods sold Merchandise inventory 3,560 Jan 15 600 Merchandise inventory Cash 600 Jan 16 .000 Cash Computer services revenue 4.000 Jan 17 Accounts payable Merchandise inventory Cash 58 5,742 Jan 20 Sales retums and allowances Accounts receivable Liu Corp. 500 Jan 22 1.653 Cash Sales discounts Accounts receivable 47 Liu Corp. 4,700 13 Jan 24 Accounts payable Merchandise inventory 496 101 Cash Debit Credit Answer is complete and correct. 106.1 Accounts ReceivableAlex's Engineering Co. Date Debit Credit Balance Dec. 31 0 Jan. 11 5 ,500 5,500 Feb. 11 5,5000 625 128 25,000 2.668 600 4.000 5,742 4.653 Date Dec. 31 Jan. 04 Mar. 31 Jan. 05 Jan. 09 Jan. 15 Jan. 16 Jan. 17 Jan. 22 Jan. 31 Feb. 01 Feb. 03 Feb. 05 Feb. 11 Feb. 15 Feb. 26 Feb. 27 Mar. 09 Mar. 11 Mar. 16 Mar. 19 OOOOOOOO 1,250 2,475 8,414 600 Balance 48,372 47,747 47.619 72,619 75.287 74,687 78,687 72,945 77,598 76,348 73,873 65,459 64,859 70,359 65,559 64,559 64,367 67,587 66,627 71,887 68,057 5,500 4,800 1,000 192 960 5,260 3,830 106.2 Accounts Receivable-Wildcat Services Date Debit Credit Balance Dec. 31 Mar. 25 2 ,800 2,800 106.3 Accounts Receivable-Easy Leasing Date Debit Credit Balance Dec. 31 Mar. 24 9,047 9,047 Date Dec. 31 Mar. 30 106.4 Accounts Receivable IFM Co. Debit Credit Balance 3,000 ~ 2,220 5,220 106.5 Accounts Receivable Liu Corporation Date Debit Credit Balance Dec. 31 Jan. 13 5 ,200 5,200 Jan. 20 500 4,700 Jan. 22 4.7000 106.7 Accounts Receivable-Delta Co. Debit Credit Balance 106.6 Accounts Receivable-Gomez Co. Date Debit Credit Balance Dec. 31 2,668 Jan. 09 2,6680 0 Date Dec. 31 Feb. 23 Mar. 09 3 ,220 3,220 3,2200 106.8 Accounts Receivable-KC, Inc. Debit Credit Balance Date Dec. 31 Jan. 26 106.9 Accounts Receivable-Dream, Inc. Date Debit Credit Balance Dec. 31 5,800 5,800 119 Merchandise Inventory 126 Computer Supplies 652 Computer Supplies Expense Debit Credit Date Balance Date Feb. 05 655 Advertising Expense Debit Credit 600 600 Balance 600 677 Miscellaneous Expenses Debit Credit Balance Date Balance Date Feb. 27 Mar. 31 676 Mileage Expense Debit Credit 192 128 192 320 684 Repairs Expense-Computer Debit Credit Date Mar. 11 Balance 960 318 Retained Earnings Debit Credit Date Date Dec. 31 Balance 7,360 319 Dividends Debit Credit 4,800 Balance 4,800 Feb. 15 Date Jan. 11 Jan 16 Mar. 16 Mar 24 403 Computer Services Revenue Debit Credit 7,000 1 4 .000 5,260 9,047 Balance 7,000 11,000 16,260 25,307 Date Jan. 13 Jan. 26 Feb. 23 Mar. 25 Mar. 30 OOOOO 413 Sales Debit Credit 5,200 5,800 3,220 2,800 2,220 Balance 5,200 11,000 14,220 17,020 19,240 Date 414 Sales Returns and Allowances Debit Credit 500 Balance Date 415 Sales Discounts Debit Credit 47 Balance 500 612 Depreciation Expense-Office Equipment Date Debit Credit Balance Date Jan 13 Jan. 26 Feb. 23 Mar. 25 Mar. 30 502 Cost of Goods Sold Debit Credit 3,560 4,640 2 ,660 2,002 1,048 38888 Balance 3,560 8,200 10,860 12,862 13,910 613 Depreciation Expense-Computer Equipment Date Debit Credit Balance Date Balance 623 Wages Expense Debit Credit 125 1,250 1,000 1.375 2,375 637 Insurance Expense Debit Credit 640 Rent Expense Debit Credit Date Balance Date Balance 652 Computer Supplies Expense Debit Credit Date Balance Date 655 Advertising Expense Debit Credit 600 Balance Feb. 05 600 126 Computer Supplies Debit Credit Date Dec. 31 Jan. 07 Jan. 137 Jan. 15 Date Dec. 31 Mar. 08 Balance 580 3,310 2,730 Jan. 17 119 Merchandise Inventory Debit Credit Balance 0 5,800 5,800 3,560 2,240 600 2,840 58 2,782 11,782 14,640 7.142 6,646 1906,556 2,660 3,896 2,002 1,894 1,048 846 Jan. 26 Jan. 26 ooooooooooo 496 Jan. 24 Feb. 03 Feb. 23 Mar. 25 Mar. 30 128 Prepaid Insurance Debit Credit 131 Prepaid Rent Debit Credit Date Dec. 31 Balance 1,665 Date Dec. 31 Feb. 01 Balance 825 3,300 2.475 163 Office Equipment Debit Credit Date Balance 8.000 164 Accumulated Depreciation Office Equipment Date Debit Credit Balance Dec. 31 400 Dec. 31 167 Computer Equipment Debit Credit Date Dec 31 Balance 20,000 168 Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Dec. 31 1,250 201 Accounts Payable Debit Credit 210 Wages Payable Debit Credit Date Dec. 31 Jan. 04 Balance 500 5,800 500 Date Dec. 31 Jan. 07 Jan. 17 Jan. 24 Jan. 26 Feb. 03 Mar. 08 Mar. 19 5,800 496 Balance 1,100 6.900 1,100 604 9,604 1.100 3,830 9,000 8,504 2,730 3 ,830 307 Common Stock Debit Credit 236 Unearned Computer Services Revenue Date Debit Credit Balance Dec. 31 1,500 Jan. 11 1 ,500 Date Dec. 31 Jan. 05 Balance 73,000 98,000 25,000 Answer is not complete. BUSINESS SOLUTIONS Partial Work Sheet March 31, 2020 Unadjusted Trial Balance Dr. Cr. 68,057 Adjustments Dr. Cr. Adjusted Trial Balance Dr. Cr. No. 2,800 9,047 5,220 101 106.1 106.2 106.3 106.4 106.5 106.6 106.7 106.8 106.9 119 126 128 131 163 5,800 846 3,310 1,665 3,300 8,000 400 20,000 1,250 164 167 168 201 210 236 307 318 319 403 413 Account Title Cash Alex's Engineering Co. Wildcat Services Easy Leasing IFM Co. Liu Corp. Gomez Co. Delta Co. KC, Inc. Dream, Inc. 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 Common 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 Mileage expense Miscellaneous expenses Repairs expenseComputer Totals 73,000 X 4,800 25,307 19,240 414 415 502 500 47 13,910 612 613 2,375 623 637 640 652 655 600 320 676 677 684 960 151,557 119,197 0 0 0 0 6. Prepare a classified balance sheet (from the adjusted trial balance) as of March 31, 2020. % Answer is complete but not entirely correct. BUSINESS SOLUTIONS Balance Sheet March 31, 2020 Assets Current assets Cash 68,052 X Merchandise inventory 704 Computer supplies 2,005 Prepaid insurance 1,249 Prepaid rent 825 Accounts receivable 22,867 OOOOOO 95,702 $ 8,000 800 Total current assets Plant assets Office equipment Accumulated depreciation Office equipment Office equipment, net Computer equipment Accumulated depreciation Computer equipment Computer equipment, net Total plant assets Total assets 20,000 2,500 17,500 24,700 120,402 Current liabilities Accounts payable Wages payable 875 Equity Common stock Retained earnings 98,000 21,527 119,527 Total equity Total liabilities and equity $ 120,402 X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Revenues Computer services revenue $ 25,307 18,693 Net sales 44,000 Total revenues Expenses Cost of goods sold $ Wages expense Advertising expense Mileage expense OOOO 14,052 ,250 600 320 Repairs expenseComputer Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Rent expense Computer supplies expense Total expenses Net income 960 400 1,250 555 2,475 1,305 OOOOOOOOOO 25,167 18,833 $ Required 4A Required 4B > Answer is not complete. Complete this question by entering your answers in the tabs below. Required 4A Required 4B Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (b) Use a multiple-step format that begins with gross sales service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative. Show less BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Net sales Expenses Selling expenses Total selling expenses General and administrative expenses Total general and administrative expenses Total expenses 0