80.2K

Verified Solution

Link Copied!

Business Solutions had the following transactions and events in December 2018.

After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows.

No.	Account Title	Debit			Credit
101	Cash	$	39,164
106	Accounts receivable		12,918
126	Computer supplies		2,645
128	Prepaid insurance		2,160
131	Prepaid rent		3,120
163	Office equipment		9,000
164	Accumulated depreciationOffice equipment				$	0
167	Computer equipment		20,000
168	Accumulated depreciationComputer equipment					0
201	Accounts payable					0
210	Wages payable					0
236	Unearned computer services revenue					0
307	Common stock					66,000
318	Retained earnings					0
319	Dividends		6,400
403	Computer services revenue					34,989
612	Depreciation expenseOffice equipment		0
613	Depreciation expenseComputer equipment		0
623	Wages expense		2,275
637	Insurance expense		0
640	Rent expense		0
652	Computer supplies expense		0
655	Advertising expense		1,688
676	Mileage expense		654
677	Miscellaneous expenses		190
684	Repairs expenseComputer		775
	Totals	$	100,989		$	100,989

Dec.	2		Paid $995 cash to Hillside Mall for Business Solutions share of mall advertising costs.
	3		Paid $460 cash for minor repairs to the companys computer.
	4		Received $4,050 cash from Alexs Engineering Co. for the receivable from November.
	10		Paid cash to Lyn Addie for six days of work at the rate of $110 per day.
	14		Notified by Alexs Engineering Co. that Business Solutions bid of $7,400 on a proposed project has been accepted. Alexs paid a $1,800 cash advance to Business Solutions.
	15		Purchased $1,600 of computer supplies on credit from Harris Office Products.
	16		Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.
	20		Completed a project for Liu Corporation and received $6,475 cash.
	2226		Took the week off for the holidays.
	28		Received $3,200 cash from Gomez Co. on its receivable.
	29		Reimbursed S. Rey for business automobile mileage (600 miles at $0.25 per mile).
	31		The company paid $1,100 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months:

1. The December 31 inventory count of computer supplies shows $640 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Lyn Addie has not been paid for four days of work at $110 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. 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, 2018. 4. Prepare an income statement for the three months ended December 31, 2018. 5. Prepare a statement of retained earnings for the three months ended December 31, 2018. 6. Prepare a balance sheet as of December 31, 2018. 7. Record and post the necessary closing entries as of December 31, 2018. 8. Prepare a post-closing trial balance as of December 31, 2018.

After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows. Credit Debit $ 39,164 12,918 2,645 2,160 3,120 9,000 $ 0 20,000 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 OOOOO Account Title Cash Accounts receivable 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 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 Totals 66,000 0 6,400 34,989 0 0 2,275 0 0 0 1,688 654 190 775 $100,989 $100,989

Answer & Explanation Solved by verified expert

See Answer