After the success of the companys first two months adriana
After the success of the company’s first two months, Adriana Lopez continues to operate Success Systems. The unadjusted trial balance (along with some new accounts) at November 30 follows.
Success Systems had the following transactions and events in December 2009.
Dec. 2 Paid $1,025 cash to Hillside Mall for Success Systems’ share of mall advertising costs.
3 Paid $500 cash for minor repairs to the company’s computer.
4 Received $3,950 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 Success’s bid of $7,000 on a proposed project has been accepted. Alex’s paid a $1,500 cash advance to Success Systems.
15 Purchased $1,100 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 $5,625 cash.
22–26 Took the week off for the holidays.
28 Received $3,000 cash as partial payment from Gomez Co. on its receivable.
29 Reimbursed Lopez’s business automobile mileage (600 miles at $0.32 per mile).
31 Paid $1,500 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.
a. The December 31 inventory count of computer supplies shows $580 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 company’s computer is expected to have a four-year life with no salvage value.
e. The office equipment is expected to have a five-year life with no salvage value.
f. Three of the four months’ prepaid rent has expired.
1. Prepare journal entries to record each of the December transactions and events for Success Systems.
Post those entries to the accounts in the ledger.
2. Prepare adjusting entries to reflect a through f. Post those entries to the accounts in the ledger.
3. Prepare an adjusted trial balance as of December 31, 2009.
4. Prepare an income statement and a statement of retained earnings for the three months ended
December 31, 2009. Prepare a balance sheet as of December 31, 2009.
5. Record and post the necessary closing entries for Success Systems.
6. Prepare a post-closing trial balance as of December 31, 2009.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help