SP 3 Serial Problem Business Solutions (Algo) LO P1, P2, P3, P4, P5 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 Account Title Cash 106 Accounts receivable 126 Computer supplies 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 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 613 623 Wages expense 637 640 Rent expense 652 655 676 677 684 901 Depreciation expense-Office equipment Depreciation expense-Computer equipment Insurance expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary Totals Debit $ 39,064 Credit 12,818 2,645 1,980 2,980 8,700 $ 0 22,800 0 0 0 0 66,000 0 6,300 36,964 0 0 2,400 0 0 0 1,698 634 210 735 0 $ 102,964 $ 102,964 Business Solutions had the following transactions and events in December 2021. December 2 Paid $935 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $480 cash for minor repairs to the company's computer. December 4 Received $4,950 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 $110 per day. December 14 Notified by Alex's Engineering Company that Business Solutions's bid of $7,900 on a proposed project has been accepted. Alex's paid a $2,000 cash advance to Business Solutions. December 15 Purchased $1,400 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 $6,125 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,700 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.28 per mile). December 31 Paid $1,400 cash for 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 $620 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 $110 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. Post those entries to the accounts in the ledger. 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. 4. Prepare an income statement for the three months ended December 31, 2021. 5. Prepare a statement of retained earnings for the three months ended December 31, 2021. 6. Prepare a classified balance sheet as of December 31, 2021. 7. Record the necessary closing entries as of December 31, 2021. 8. Prepare a post-closing trial balance as of December 31, 2021. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 101: Cash 106: Accounts Receivable Date December 01 Debit Credit Balance Date Debit Credit Balance 39,064 December 01 12,818 December 02 935 38,129 December 04 4,950 7,868 December 03 480 37,649 December 28 3,700 4,168 December 04 4,950 42,599 December 10 660 41,939 December 14 2,000 43,939 December 20 6,125 50,064 December 28 3,700 53,764 December 29 140 53,624 December 31 1,400 52,224 Date December 01 December 15 December 31 126: Computer Supplies Debit Credit Balance Date 2,645 December 01 1,400 4,045 December 31 3,425 620 131: Prepaid Rent Date Debit December 01 December 31 Credit Balance Date 2,980 December 01 164: Accumulated Depreciation-Office Equipment Date December 01 December 31 Debit Credit Balance Date 0 December 01 128: Prepaid Insurance Debit Credit 163: Office Equipment Debit Balance 1,980 495 1,485 Credit Balance 8,700 167: Computer Equipment Debit Credit Balance 22,800 168: Accumulated Depreciation-Computer Equipment Date December 01 December 31 Date December 01 December 31 Date December 01 Debit Credit 210: Wages Payable Debit Balance Date 0 December 01 Credit Balance Date 0 December 01 307: Common Stock Debit 201: Accounts Payable Debit Credit Balance 0 236: Unearned Computer Services Revenue Debit Credit Balance 0 318: Retained Earnings Credit Balance Date Debit Credit Balance 66,000 December 01 0 Date 319: Dividends Debit 403: Computer Services Revenue Credit Balance December 01 6,300 Date December 01 Debit Credit Balance 36,964 December 31 612: Depreciation Expense-Office Equipment Date December 01 December 31 Date December 01 Debit Credit 623: Wages Expense Debit 613: Depreciation Expense-Computer Equipment Balance Date 0 December 01 Credit Balance Date 2,400 December 01 Debit Credit 637: Insurance Expense Debit Balance 0 Credit Balance 0 Date December 01 Date December 01 Date December 01 640: Rent Expense Debit Credit Balance Date 0 December 01 655: Advertising Expense Debit Credit Balance Date 1,698 December 01 677: Miscellaneous Expense Debit Credit Balance 210 Date December 01 652: Computer Supplies Expense Debit Credit 676: Mileage Expense Debit Balance 0 Credit Balance 634 684: Repairs Expense-Computer Debit Credit Balance 735