SERIAL PROBLEM - Aster SystemsThis comprehensive problem starts in this chapter 2 and continues in Chapters 3, 4, and 5. On October 1, 2020, Aster Turane organized a computer service company called Aster Systems. Aster is organized as a sole proprietorship and will provide consulting services, computersystem installations, and custom program development. Aster Systems 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 Name101Cash301Aster Turane, Capital106Accounts Receivable302Aster Turane, Withdrawals126Computer Supplies403Computer Services Revenue128Prepaid Insurance623Wages Expense131Prepaid Rent655Advertising Expense163Office Equipment676Mileage Expense167Computer Equipment684Repairs Expense, Computer201Accounts Payable699Charitable Donations ExpensePart ARequired1. 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. Oct. 1Aster Turane invested $32,000 cash, a $5,040 computer system, and $12,000 of office equipment in the business. 2Paid six months of rent in advance; $9,300. 3Purchased computer supplies on credit for $1,975 from Triple-One Supplies. 5Paid $8,640 cash for one year's premium on a property and liability insurance policy. 6Billed Norton Electric $3,300 for installing a new computer system. 8Paid for the computer supplies purchased from Triple-One Supplies. 10Hired Donald Gee as a part-time assistant for $345 per day, as needed. 12Billed Norton Electric another $1,850 for computer services rendered. 15Received $1,650 from Norton Electric on its account. 17Paid $375 to repair equipment damaged when moving into the new office. 20Paid $1,950 for an advertisement in the local newspaper. 22Received the balance owing from Norton Electric on its account. 28Billed Whistler Resort $6,400 for services. 31Paid Donald Gee for nine days' work. 31Aster Turane withdrew $1,200 cash from the business for personal use. Part BRequired6. 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 Novembe 30, 2020.Nov. 1Reimbursed Aster Turane's business automobile expense for 2,630 kilometres at $1.60 per kilometre. 2Received $7,920 cash from Langara Lodge for computer services rendered. 5Purchased $420 of computer supplies for cash from Triple-One Supplies. 8Billed Dinwoody Entertainment $4,230 for computer services rendered. 13Notified by Kinsetta Groceries that Aster's bid of $5,950 for an upcoming project was accepted. 18Received $4,200 from Whistler Resort against the bill dated October 28. 22Donated $500 to the Hope Mission in the company's name. 24Completed work for Kinsetta Groceries and sent a bill for the agreed amount. 25Sent another bill to Whistler Resort for the past due amount of $2,200. 28Reimbursed Aster Turane's business automobile expense for 1,080 kilometres at $1.60 per kilometre. 30Paid Donald Gee for 17 days' work. 30Aster Turane withdrew $1,400 cash from the business for personal This comprehensive problem was introduced in Chapter 2 and continues in Chapters 4 and 5. If the Chapter 2 segment has not been completed, the assignment can begin at this point. After the success of its first two months, Aster Turane has decided to continue operating Aster Systems. (The transactions that occurred in these months are described in Chapter 2.)Before proceeding in December, Turane adds these new accounts to the chart of accounts forthe ledger: AccountNo.Accumulated Depreciation, Office Equipment164 Accumulated Depreciation, Computer Equipment168 Wages Payable210 Unearned Computer Services Revenue236 Depreciation Expense, Office Equipment612 Depreciation Expense, Computer Equipment613 Insurance Expense637 Rent Expense640 Computer Supplies Expense652 Required1. Prepare journal entries to record each of the following transactions for Aster Systems. Post the entries to the accounts in the ledger.Dec. 3Paid $3,800 to the Kingsway Garden Mall for the company's share of mall advertising costs for December. 3Paid $1,040 to repair the company's computer. 4Received the balance owing from Kinsetta Groceries. 10Paid Donald Gee for eight days' work at the rate of $345 per day. 14Notified by Kinsetta Groceries that Aster's bid of $6,500 on a proposed project was accepted. Kinsetta paid an advance of $3,000. 17Purchased $740 of computer supplies on credit from Triple-One Supplies. 18Sent a reminder to Dinwoody Entertainment to pay the $4,230 originally recorded on November 8. 20Completed a project for Langara Lodge and received $1,100 cash. 24-28Took the week off for the holidays. 31Received $1,800 as partial payment from Dinwoody Entertainment. 31Reimbursed Aster Turane's business automobile expenses of 1,800 kilometres at $1.60 per kilometre. 31Aster Turane withdrew $800 cash from the business. 2. Prepare adjusting entries to record the following additional information collected on December 31, 2020. Post the entries to the accounts in the ledger.Dec. 31a. The December 31 inventory of computer supplies was $480. b. Three months have passed since the annual insurance premium was paid. c. As of the end of the year, Donald Gee has not been paid for four days of work at the rate of $345 per day. d. The computer equipment is expected to have a five-year life with no residual value. e. The office equipment is expected to have a ten-year life with no residual value. f. Prepaid rent for three of the six months has expired. 3. Prepare an adjusted trial balance as of December 31, 2020.4. Prepare an income statement and statement of changes in equity for the three months ended December 31, 2020.5. Prepare a balance sheet as of December 31, 2020.

CUMULATIVE PROBLEM - Aster Systems

The first two segments of this comprehensive problem were in Chapters 2 and 3, and the final segment

is presented in Chapter 5. If the Chapter 2 and 3 segments have not been completed, the assignment

can begin at this point. It is recommended that you use the Working Papers1 that accompany this

book because they reflect the account balances that resulted from posting the entries required in

Chapters 2 and 3.

The transactions of Aster Systems for October through December 2020 have been recorded in the

problem segments in Chapters 2 and 3, as well as the year-end adjusting entries. Prior to closing

the revenue and expense accounts for 2020, the accounting system is modified to include the

Income Summary account, which is given the number 901.

Required

1. Record and post the appropriate closing entries.

2. Prepare a post-closing trial balance.

1If students have not purchased the Working Papers package, the Working Papers for the serial