60.1K

Verified Solution

Link Copied!

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.

Number	Account Title	Debat	Credit
101	Cash	$ 38,564
106	Accounts receivable	12,918
126	Computer supplies	2,545
128	Prepaid insurance	2,040
131	Prepaid rent	3,140
163	Office equipment	9,000
164	Accumulated depreciation Office equipment
167	Computer equipment	21,600
168	Accumulated depreciation-Computer equipment
201	Accounts payable
210	Wages payable		0 0/3
236	Unearned computer services revenue
307	Common stock		66,000
318	Retained earnings
319	Dividends	6,100
403	Computer services revenue		35,679
612	Depreciation expense-Office equipment
613	Depreciation expense-Computer equipment	2,525
623	Wages expense
637	Insurance expense
640	Rent expense
652	Computer supplies expense	1,718
655	Advertising expense	634
676	Mileage expense	150
677	Miscellaneous expenses	745
684	Repairs expense-Computer

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.
3. b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger.
4. Prepare an adjusted trial balance as of December 31, 2021.
5. Prepare an income statement for the three months ended December 31, 2021.
6. Prepare a statement of retained earnings for the three months ended December 31, 2021.
7. Prepare a classified balance sheet as of December 31, 2021.
8. Record the necessary closing entries as of December 31, 2021.
9. Prepare a post-closing trial balance as of December 31, 2021.Business Solutions had the following transactions and events in December 2021.

December 2 Paid $965 cash to Hillside Mall for Business Solutions's share of mall advertising costs.

December 3

Paid $420 cash for minor repairs to the company's computer.

December 4 Received $4,550 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 $120 per day.

December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,200 on a proposed project has been

accepted. Alex's paid a $1,800 cash advance to Business Solutions

December 15

Purchased $1,700 of computer supplies on credit from Harris Office 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 $6,175 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 (400 miles at $0.32 per mile).

December 31 Paid $1,300 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.

1. The December 31 inventory count of computer supplies shows $680 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 $120 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.

Answer & Explanation Solved by verified expert

See Answer