Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its...

  
  

 

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Santana Rey created Business Solutions on October 1, 2019. 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, 2019. 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. Debit $48,422 No. Account Title Credit 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 3,060 106.5 Liu Corp. 106.6 Gomez Co. 2,748 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. Merchandise inventory Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment 119 126 650 1,855 795 128 131 162 163 8,150 $ 20,600 164 260 Computer equipment Accumulated depreciation-Computer equipment 167 168 1,060 1,160 900 201 Accounts payable Wages payable Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals Computer services revenue Sales 210 1,490 81,410 236 301 302 403 413 Sales returns and allowances Sales discounts 414 415 502 Cost of goods sold 106.5 Liu Corp. 106.6 Gomez Co. 2,748 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. Merchandise inventory 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 S. Rey, Capital S. Rey, Withdrawals Computer services revenue Sales 119 126 650 128 1,855 795 131 8,150 $ 163 164 260 167 20,600 168 1,060 1,160 201 210 900 236 1,490 301 81,410 302 403 413 Sales returns and allowances Sales discounts 414 415 502 Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment 612 613 623 Wages expense Insurance expense 637 640 Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses 652 655 676 677 684 Repairs expense-Computer O o o o o o o o o oo o o 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 (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Also, Business Solutions does not use reversing entries and, therefore, all revenue and expense accounts have zero beginning balances as of January 1, 2018. Its transactions for January through March follow: 4 The company paid cash to Lyn Addie for five days' work at the rate of $225 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,600 cash in the company. 7 The company purchased $6,300 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, Jan. invoice dated January 7. 9 The company received $2,748 cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,380, which is the total price of $ 6,870 less the advance payment of $1,490. The company debited Unearned Computer Services Revenue for $ 1,490. 13 The company sold merchandise with a retail value of $4,000 and a cost of $3,410 to Liu Corp., invoice dated January 13. 15 The company paid $630 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,150 cash from Delta Co. for computer services provided. 17 The company paid Kansas Corp. for the invoice dated January 7, net of the discount. 20 The company gave a price reduction (allowance) of $600 to Liu Corp., and credited Liu's accounts receivable for that amount. 22 The company received the balance due from Liu Corp., net of the discount and the allowance. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $476. 26 The company purchased $9,600 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26. 26 The company sold merchandise with a $4,540 cost for $5,840 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $225 per day. 1 The company paid $2,295 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $476 credit from merchandise returned on January 24. 5 The company paid $410 cash to facebook for an advertisement to appear on February 5 only. Feb. 11 The comnany received the halancre due from Alex'e Engineering Co for fees hilled on Januarv 11 31 The company paid cash to Lyn Addie for 10 days' work at $225 per day. 1 The company paid $2,295 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $476 credit from merchandise returned on January 24. 5 The company paid $410 cash to facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 Santana Rey withdrew $4,610 cash from the company for personal use. 23 The company sold merchandise with a $2,460 cost for $3,400 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $225 per day. 27 The company reimbursed Santana Rey $352 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 8 The company purchased $2,880 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $790 cash for minor repairs to the company's computer. 16 The company received $5,450 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $4,040 to Harris Office Products, consisting of amounts created on December 15 (of $1, 160) and March 8. 24 The company billed Easy Leasing for $9,067 of computing services provided. 25 The company sold merchandise with a $2,122 cost for $2,810 on credit to Wildcat Services, invoice dated March Feb. Mar. 25. 30 The company sold merchandise with a $1,188 cost for $2,400 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $224 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." Assume that Santana Rey expands Business Solutions' system to include special journals. Required: 2. & 3. Enter the Business Solutions transactions for January through March in a sales journal, cash receipts journal, purchases journal, and cash payments journal or general journal. If the transaction does not specify the name of the payee, state "not specified" in the Payee column of the cash payments journal. The transactions on the following dates should be journalized in the general journal: January 5, 11, 20, and 24 and March 24. Do not post the adjusting entries for the end of March. Santana Rey created Business Solutions on October 1, 2019. 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, 2019. 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. Debit $48,422 No. Account Title Credit 101 Cash 106.1 Alex's Engineering Co. 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM Co. 3,060 106.5 Liu Corp. 106.6 Gomez Co. 2,748 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. Merchandise inventory Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment 119 126 650 1,855 795 128 131 162 163 8,150 $ 20,600 164 260 Computer equipment Accumulated depreciation-Computer equipment 167 168 1,060 1,160 900 201 Accounts payable Wages payable Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals Computer services revenue Sales 210 1,490 81,410 236 301 302 403 413 Sales returns and allowances Sales discounts 414 415 502 Cost of goods sold 106.5 Liu Corp. 106.6 Gomez Co. 2,748 106.7 Delta Co. 106.8 KC, Inc. 106.9 Dream, Inc. Merchandise inventory 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 S. Rey, Capital S. Rey, Withdrawals Computer services revenue Sales 119 126 650 128 1,855 795 131 8,150 $ 163 164 260 167 20,600 168 1,060 1,160 201 210 900 236 1,490 301 81,410 302 403 413 Sales returns and allowances Sales discounts 414 415 502 Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment 612 613 623 Wages expense Insurance expense 637 640 Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses 652 655 676 677 684 Repairs expense-Computer O o o o o o o o o oo o o 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 (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Also, Business Solutions does not use reversing entries and, therefore, all revenue and expense accounts have zero beginning balances as of January 1, 2018. Its transactions for January through March follow: 4 The company paid cash to Lyn Addie for five days' work at the rate of $225 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Santana Rey invested an additional $24,600 cash in the company. 7 The company purchased $6,300 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, Jan. invoice dated January 7. 9 The company received $2,748 cash from Gomez Co. as full payment on its account. 11 The company completed a five-day project for Alex's Engineering Co. and billed it $5,380, which is the total price of $ 6,870 less the advance payment of $1,490. The company debited Unearned Computer Services Revenue for $ 1,490. 13 The company sold merchandise with a retail value of $4,000 and a cost of $3,410 to Liu Corp., invoice dated January 13. 15 The company paid $630 cash for freight charges on the merchandise purchased on January 7. 16 The company received $4,150 cash from Delta Co. for computer services provided. 17 The company paid Kansas Corp. for the invoice dated January 7, net of the discount. 20 The company gave a price reduction (allowance) of $600 to Liu Corp., and credited Liu's accounts receivable for that amount. 22 The company received the balance due from Liu Corp., net of the discount and the allowance. 24 The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $476. 26 The company purchased $9,600 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26. 26 The company sold merchandise with a $4,540 cost for $5,840 on credit to KC, Inc., invoice dated January 26. 31 The company paid cash to Lyn Addie for 10 days' work at $225 per day. 1 The company paid $2,295 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $476 credit from merchandise returned on January 24. 5 The company paid $410 cash to facebook for an advertisement to appear on February 5 only. Feb. 11 The comnany received the halancre due from Alex'e Engineering Co for fees hilled on Januarv 11 31 The company paid cash to Lyn Addie for 10 days' work at $225 per day. 1 The company paid $2,295 cash to Hillside Mall for another three months' rent in advance. 3 The company paid Kansas Corp. for the balance due, net of the cash discount, less the $476 credit from merchandise returned on January 24. 5 The company paid $410 cash to facebook for an advertisement to appear on February 5 only. 11 The company received the balance due from Alex's Engineering Co. for fees billed on January 11. 15 Santana Rey withdrew $4,610 cash from the company for personal use. 23 The company sold merchandise with a $2,460 cost for $3,400 on credit to Delta Co., invoice dated February 23. 26 The company paid cash to Lyn Addie for eight days' work at $225 per day. 27 The company reimbursed Santana Rey $352 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 8 The company purchased $2,880 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 9 The company received the balance due from Delta Co. for merchandise sold on February 23. 11 The company paid $790 cash for minor repairs to the company's computer. 16 The company received $5,450 cash from Dream, Inc., for computing services provided. 19 The company paid the full amount due of $4,040 to Harris Office Products, consisting of amounts created on December 15 (of $1, 160) and March 8. 24 The company billed Easy Leasing for $9,067 of computing services provided. 25 The company sold merchandise with a $2,122 cost for $2,810 on credit to Wildcat Services, invoice dated March Feb. Mar. 25. 30 The company sold merchandise with a $1,188 cost for $2,400 on credit to IFM Company, invoice dated March 30. 31 The company reimbursed Santana Rey $224 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." Assume that Santana Rey expands Business Solutions' system to include special journals. Required: 2. & 3. Enter the Business Solutions transactions for January through March in a sales journal, cash receipts journal, purchases journal, and cash payments journal or general journal. If the transaction does not specify the name of the payee, state "not specified" in the Payee column of the cash payments journal. The transactions on the following dates should be journalized in the general journal: January 5, 11, 20, and 24 and March 24. Do not post the adjusting entries for the end of March.