After the success of the company's first two months, Santana Rey continues to operate Business Solutions....
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After 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 101 106 Cash Accounts receivable 126 Computer supplies Account Title 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 S. Rey, Capital 302 5. Rey, Withdrawals 403 612 613 623 Wages expense 637 640 Rent expense 652 655 Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals Debit Credit $ 38,264 12,618 2,545 2,220 3,300 8,000 $ 0 20,000 B B B B 73,000 5,600 25,659 0 2,625 0 1,728 704 250 805 $ 98,659 $ 98,659 Business Solutions had the following transactions and events in December 2021. December 2 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $500 cash for minor repairs to the company's computer. December 4 Received $3,950 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 $125 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Business Solutions. December 15 Purchased $1,100 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 $5,625 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,000 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). December 31 S. Rey withdrew $1,500 cash from the company for personal use. 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 computer system, acquired on October 1, Is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2021. After 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 101 106 Cash Accounts receivable 126 Computer supplies Account Title 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 S. Rey, Capital 302 5. Rey, Withdrawals 403 612 613 623 Wages expense 637 640 Rent expense 652 655 Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals Debit Credit $ 38,264 12,618 2,545 2,220 3,300 8,000 $ 0 20,000 B B B B 73,000 5,600 25,659 0 2,625 0 1,728 704 250 805 $ 98,659 $ 98,659 Business Solutions had the following transactions and events in December 2021. December 2 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $500 cash for minor repairs to the company's computer. December 4 Received $3,950 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 $125 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Business Solutions. December 15 Purchased $1,100 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 $5,625 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,000 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). December 31 S. Rey withdrew $1,500 cash from the company for personal use. 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 computer system, acquired on October 1, Is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2021.
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Related Book For
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett
Posted Date:
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