Analyze your results for Business Solutions by answering the specific questions on the provided memo form...

 

  
   

 

 

 
 
 

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Analyze your results for Business Solutions by answering the specific questions on the provided memo form in Canvas. The following questions should be answered in your analysis, your writing must be in your own work. Based on your financial statements for Business Solutions answer the following questions: 1. Complete the accounting equation for Business Solutions using the amounts in this format: $ 2. In discussing Business Solutions latest financial statements, you as the manager say that it is the "the net income results on the bottom line" that really count. What do you mean? Which financial statement are you referring to? Are the results reflected satisfactory? Explain your answers. 3. Does Business Solutions have enough cash to pay its liabilities on December 31, 2020? Please list the December 31 balance of cash, subtract the amount of total current liabilities and calculate the overage or shortfall cash amount. Does Business Solutions need to improve this situation? If your answer is that no improvement is needed, please describe what they are doing correctly. If your answer is yes improvement is needed, please provide a suggestion on how the company may improve. BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2020 Account Title Cash Accounts receivable 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 Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment $ Debit 52,156 4,568 590 1,485 735 8,700 23,600 7,600 435 $ Credit 435 1,475 1,900 500 2,300 71,000 38,689 + X Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals $ 7,600 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 116,299 71,000 38,689 S 116,299 x Revenue Computer services revenue BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2020 Expenses Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense Computer Total expenses Net income 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 $ + $ 38,689 16,865 21,824 Assets Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity BUSINESS SOLUTIONS Balance Sheet December 31, 2020 Common stock Retained earnings X $8,700 435 23,600 1,475 $ $ $ 52,156 4,568 590 1,485 735 8,265 22,125 89,924 1,900 500 2,300 4,700 71,000 14,224 risparmiare Prepaid rent Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity Common stock Retained earnings Total equity Total Liabilities and Equity X X X $8,700 435 23,600 1,475 $ $ $ 1,400 735 8,265 22,125 89,924 1,900 500 2,300 4,700 71,000 14,224 85,224 89,924 No 1 2 3 4 Date December 31 December 31 December 31 December 31 Computer services revenue Income summary Income summary Depreciation expense-Office equipment Depreciation expense Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary General Journal Retained earnings Retained earnings Dividends ›› Debit 38,689 16,865 21,824 7,600 Credit 38,689 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 21,824 7,600 Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2020 Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Totals $ Debit 52,156 4,568 590 1,485 735 8,700 23,600 $ Credit 435 1,475 1,900 500 2,300 71,000 14,224 $ 91,834 $ 91,834 3 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018 unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows. Account Title No. 101 Cash Accounts receivable Computer supplies 128. Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-office equipment Computer equipment 167 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable. Unearned computer services revenue Common stock 106 126 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals Debit $ 38,264 13,018 2,645 2,040 3,240 8,800 21,200 6,100 e 2,350 0 0 0 1,688 664 160 785 $100,954 $ Credit e $100,954 e 70,000 @ Business Solutions had the following transactions and events in December 2018. 0 e 30,954 ed Dec. 2 Paid $988 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $478 cash for minor repairs to the company's computer. 4 Received $4,250 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 $100 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,600 on a proposed project has been accepted. Alex's paid a $1,600 cash advance to Business Solutions. 15 Purchased $1,700 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 $6,225 cash. 22- Took the week off for the holidays. 26 28 Received $3,400 cash from Gonez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.24 per mile). 31 The company paid $1,000 cash in 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 $100 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, 2018. 4. Prepare an income statement for the three months ended December 31, 2018. 5. Prepare a statement of retained earnings for the three months ended December 31, 2018. 6. Prepare a balance sheet as of December 31, 2018. 7. Record and post the necessary closing entries as of December 31, 2018 8. Prepare a post-closing trial balance as of December 31, 2018. Analyze your results for Business Solutions by answering the specific questions on the provided memo form in Canvas. The following questions should be answered in your analysis, your writing must be in your own work. Based on your financial statements for Business Solutions answer the following questions: 1. Complete the accounting equation for Business Solutions using the amounts in this format: $ 2. In discussing Business Solutions latest financial statements, you as the manager say that it is the "the net income results on the bottom line" that really count. What do you mean? Which financial statement are you referring to? Are the results reflected satisfactory? Explain your answers. 3. Does Business Solutions have enough cash to pay its liabilities on December 31, 2020? Please list the December 31 balance of cash, subtract the amount of total current liabilities and calculate the overage or shortfall cash amount. Does Business Solutions need to improve this situation? If your answer is that no improvement is needed, please describe what they are doing correctly. If your answer is yes improvement is needed, please provide a suggestion on how the company may improve. BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2020 Account Title Cash Accounts receivable 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 Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment $ Debit 52,156 4,568 590 1,485 735 8,700 23,600 7,600 435 $ Credit 435 1,475 1,900 500 2,300 71,000 38,689 + X Common stock Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals $ 7,600 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 116,299 71,000 38,689 S 116,299 x Revenue Computer services revenue BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2020 Expenses Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense Computer Total expenses Net income 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 $ + $ 38,689 16,865 21,824 Assets Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity BUSINESS SOLUTIONS Balance Sheet December 31, 2020 Common stock Retained earnings X $8,700 435 23,600 1,475 $ $ $ 52,156 4,568 590 1,485 735 8,265 22,125 89,924 1,900 500 2,300 4,700 71,000 14,224 risparmiare Prepaid rent Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity Common stock Retained earnings Total equity Total Liabilities and Equity X X X $8,700 435 23,600 1,475 $ $ $ 1,400 735 8,265 22,125 89,924 1,900 500 2,300 4,700 71,000 14,224 85,224 89,924 No 1 2 3 4 Date December 31 December 31 December 31 December 31 Computer services revenue Income summary Income summary Depreciation expense-Office equipment Depreciation expense Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary General Journal Retained earnings Retained earnings Dividends ›› Debit 38,689 16,865 21,824 7,600 Credit 38,689 435 1,475 3,600 495 2,205 3,855 2,663 722 200 1,215 21,824 7,600 Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2020 Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Totals $ Debit 52,156 4,568 590 1,485 735 8,700 23,600 $ Credit 435 1,475 1,900 500 2,300 71,000 14,224 $ 91,834 $ 91,834 3 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018 unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows. Account Title No. 101 Cash Accounts receivable Computer supplies 128. Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-office equipment Computer equipment 167 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable. Unearned computer services revenue Common stock 106 126 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 Retained earnings Dividends Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals Debit $ 38,264 13,018 2,645 2,040 3,240 8,800 21,200 6,100 e 2,350 0 0 0 1,688 664 160 785 $100,954 $ Credit e $100,954 e 70,000 @ Business Solutions had the following transactions and events in December 2018. 0 e 30,954 ed Dec. 2 Paid $988 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $478 cash for minor repairs to the company's computer. 4 Received $4,250 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 $100 per day. 14 Notified by Alex's Engineering Co. that Business Solutions' bid of $7,600 on a proposed project has been accepted. Alex's paid a $1,600 cash advance to Business Solutions. 15 Purchased $1,700 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 $6,225 cash. 22- Took the week off for the holidays. 26 28 Received $3,400 cash from Gonez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.24 per mile). 31 The company paid $1,000 cash in 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 $100 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, 2018. 4. Prepare an income statement for the three months ended December 31, 2018. 5. Prepare a statement of retained earnings for the three months ended December 31, 2018. 6. Prepare a balance sheet as of December 31, 2018. 7. Record and post the necessary closing entries as of December 31, 2018 8. Prepare a post-closing trial balance as of December 31, 2018.