On October 1, 2020, Mary Graham organized a computer service company called Echo Systems. Echo is organized as a sole proprietorship and will provide consulting services, computer system installations, and custom program development. Graham has adopted the calendar year for reporting, and expects to prepare the company?s first set of financial statements as of December 31, 2020. The initial chart of accounts for the accounting system includes these items:

Part A:

Required

1. Set up balance column accounts based on the chart of accounts provided.

2. Prepare journal entries to record each of the following October transactions.

3. Post the October entries.

4. Prepare a trial balance at October 31, 2020.

5. Prepare an income statement and a statement of changes in equity for the month ended October 31, 2020, as well as a balance sheet at October 31, 2020.

Part B:

Required

6. Prepare journal entries to record each of the following November transactions.

7. Post the November entries.

8. Prepare a trial balance at November 30, 2020.

9. Prepare an income statement and a statement of changes in equity for the two months ended November 30, 2020, as well as a balance sheet at November 30, 2020.

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Account Number Account Name Account Number Account Name Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Computer Equipment Accounts Payable 301 302 403 623 655 676 684 Mary Graham, Capital Mary Graham, Withdrawals Computer Services Revenue Wages Expense Advertising Expense Mileage Expense Repairs Expense, Computer Charitable Donations Expense 101 106 126 128 131 163 167 201 699 Oct Graham invested $90,000 cash, a $36,000 computer system, and $18,000 of office equipment in the business. Paid rent in advance of $9,000. 3 Purchased computer supplies on credit for $2,640 from Abbott Office Products. Paid $4,320 cash for one year's premium on a property and liability insurance policy. Billed Capital Leasing $6,600 for installing a new computer. Paid for the computer supplies purchased from Abbott Office Products. Hired Carly Smith as a part-time assistant for $200 per day, as needed. Billed Capital Leasing another $2,400 for computer services rendered. Received $6,600 from Capital Leasing on its account. 10 12 15 Paid $1,410 to repair computer equipment damaged when moving into the new office. Paid $3,720 for an advertisement in the local newspaper. Received $2,400 from Capital Leasing on its account. 17 20 22 28 Billed Decker Company $6,450 for services. 31 Paid Carly Smith for seven days' work. 31 Withdrew $7,200 cash from the business for personal use.