CUMULATIVE COMPREHENSION PROBLEM: ECHO SYSTEMS (This comprehensive problem starts in this chapter and continues in & Chapters 3, 9 4, and 5. Because of its length, this problem is most easily solved if you use the Working Papers14 that accompany this text.) 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: Account Number Account Name Account Number Account Name 101 Cash 301 Mary Graham, Capital 106 Accounts Receivable 302 Mary Graham, Withdrawals 126 Computer Supplies 403 Computer Services Revenue 128 Prepaid Insurance 623 Wages Expense 131 Prepaid Rent 655 Advertising Expense 163 Office Equipment 676 Mileage Expense 167 Computer Equipment 684 Repairs Expense, Computer 201 Accounts Payable 699 Charitable Donations ExpensePART A: CHECK FIGURES: 4. Total Dr. = $159,450; Profit = $8,920; Total assets = $145,720 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.Page 153 Oct. 1 Graham invested $90,000 cash, a $36,000 computer system, and $18,000 of office equipment in the business. 2 Paid rent in advance of $9,000. 3 Purchased computer supplies on credit for $2,640 from Abbott Office Products. 5 Paid $4,320 cash for one year's premium on a property and liability insurance policy. 6 Billed Capital Leasing $6,600 for installing a new computer. 8 Paid for the computer supplies purchased from Abbott Office Products. 10 Hired Carly Smith as a part-time assistant for $200 per day, as needed. 12 Billed Capital Leasing another $2,400 for computer services rendered. 15 Received $6,600 from Capital Leasing on its account. 17 Paid $1,410 to repair computer equipment damaged when moving into the new office. 20 Paid $3,720 for an advertisement in the local newspaper. 22 Received $2,400 from Capital Leasing on its account. 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.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. Nov. 1 Reimbursed Graham's business automobile expense for 1,000 kilometres at $1.00 per kilometre. 2 Received $9,300 cash from Elite Corporation for computer services rendered. 5 Purchased $1,920 of computer supplies for cash from Abbott Office Products. 8 Billed Fostek Co. $8,700 for computer services rendered. 13 Notified by Alamo Engineering Co. that Echo's bid of $7,500 for an upcoming project was accepted. 18 Received $3,750 from Decker Company against the bill dated October 28. 22 Donated $1,500 to the United Way in the company's name. 24 Completed work for Alamo Engineering Co. and sent a bill for $7,500. 25 Sent another bill to Decker Company for the past due amount of $2,700. 28 Reimbursed Graham's business automobile expense for 1,200 kilometres at $1.00 per kilometre. 30 Paid Carly Smith for 14 days' work. 30 Withdrew $3,600 cash from the business for personal use