Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and its...
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Santana Rey created Business Solutions on October 1, 2021. 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, 2021. 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. Number Account Title 101 Cash 106.1 Alex's Engineering Company 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation 106.6 106.7 106.8 KC, Incorporated 106.9 119 126 Gomez Company Delta Company Dream, Incorporated Computer supplies Merchandise inventory 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 301 Common stock 318 319 403 Retained earnings Dividends Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 613 623 Wages expense 637 640 Rent expense 652 Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense 655 Advertising expense 676 677 Mileage expense Miscellaneous expenses 684 Repairs expense-Computer Debit $ 48,552 Credit 0 0 0 3,160 0 2,778 0 0 0 0 760 1,935 915 8,190 $ 300 20,200 1,170 1,280 0 0 0 0 0 0 0 0 0 0 620 1,380 72,480 9,260 0 0 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 (Numbers. 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. January 4 The company paid cash to Lyn Addie for five days' work at the rate of $155 per day. Four of the five days relate to wages payable that were accrued in the prior year. January 5 Santana Rey invested an additional $23,700 cash in the company in exchange for more common stock. January 7 The company purchased $6,300 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. January 9 The company received $2,778 cash from Gomez Company as full payment on its account. January 11 The company completed a five-day project for Alex's Engineering Company and billed it $5,460, which is the total price of $6,840 less the advance payment of $1,380. The company debited Unearned Computer Services Revenue for $1,380. January 13 The company sold merchandise with a retail value of $4,600 and a cost of $3,490 to Liu Corporation, invoice dated January 13. January 15 The company paid $770 cash for freight charges on the merchandise purchased on January 7. Santana Rey created Business Solutions on October 1, 2021. 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, 2021. 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. Number Account Title 101 Cash 106.1 Alex's Engineering Company 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation 106.6 106.7 106.8 KC, Incorporated 106.9 119 126 Gomez Company Delta Company Dream, Incorporated Computer supplies Merchandise inventory 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-Office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 301 Common stock 318 319 403 Retained earnings Dividends Computer services revenue 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 613 623 Wages expense 637 640 Rent expense 652 Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense 655 Advertising expense 676 677 Mileage expense Miscellaneous expenses 684 Repairs expense-Computer Debit $ 48,552 Credit 0 0 0 3,160 0 2,778 0 0 0 0 760 1,935 915 8,190 $ 300 20,200 1,170 1,280 0 0 0 0 0 0 0 0 0 0 620 1,380 72,480 9,260 0 0 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 (Numbers. 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. January 4 The company paid cash to Lyn Addie for five days' work at the rate of $155 per day. Four of the five days relate to wages payable that were accrued in the prior year. January 5 Santana Rey invested an additional $23,700 cash in the company in exchange for more common stock. January 7 The company purchased $6,300 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. January 9 The company received $2,778 cash from Gomez Company as full payment on its account. January 11 The company completed a five-day project for Alex's Engineering Company and billed it $5,460, which is the total price of $6,840 less the advance payment of $1,380. The company debited Unearned Computer Services Revenue for $1,380. January 13 The company sold merchandise with a retail value of $4,600 and a cost of $3,490 to Liu Corporation, invoice dated January 13. January 15 The company paid $770 cash for freight charges on the merchandise purchased on January 7.
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Related Book For
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett
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