After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2020) follows. Accumulated depreciation-Office equipment Number 101 Account Title Debit Credit Cash 106 126 Accounts receivable $ 38,764 13,118 Computer supplies 2,645 128 Prepaid insurance 2,100 131 Prepaid rent 3,140 163 Office equipment 8,700 164 $ 0 167 Computer equipment 20,000 168 Accumulated depreciation-Computer equipment 0 201 Accounts payable 0 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-office equipment 613 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 676 Mileage expense 677 684 Repairs expense-Computer Totals Depreciation expense-Computer equipment Advertising expense Miscellaneous expenses 67,000 5,800 32,904 2,450 е 1,648 624 150 765 $ 99,904 $ 99,904 Business Solutions had the following transactions and events in December 2020. December 2 Paid $980 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $470 cash for minor repairs to the company's computer. December 4 Received $4,450 cash from Alex's Engineering Co. 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 $7,100 on a proposed project has beent accepted. Alex's paid a $2,200 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 $6,075 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,400 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 The company paid $1,400 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 $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 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 from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts. 3. Prepare an adjusted trial balance as of December 31, 2020. 4. Prepare an income statement for the three months ended December 31, 2020. 5. Prepare a statement of retained earnings for the three months ended December 31, 2020. 6. Prepare a balance sheet as of December 31, 2020. 7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B. 8. Prepare a post-closing trial balance as of December 31, 2020.

After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2020) follows. Accumulated depreciation-Office equipment Number 101 Account Title Debit Credit Cash 106 126 Accounts receivable $ 38,764 13,118 Computer supplies 2,645 128 Prepaid insurance 2,100 131 Prepaid rent 3,140 163 Office equipment 8,700 164 $ 0 167 Computer equipment 20,000 168 Accumulated depreciation-Computer equipment 0 201 Accounts payable 0 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-office equipment 613 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 676 Mileage expense 677 684 Repairs expense-Computer Totals Depreciation expense-Computer equipment Advertising expense Miscellaneous expenses 67,000 5,800 32,904 2,450 е 1,648 624 150 765 $ 99,904 $ 99,904 Business Solutions had the following transactions and events in December 2020. December 2 Paid $980 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $470 cash for minor repairs to the company's computer. December 4 Received $4,450 cash from Alex's Engineering Co. 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 $7,100 on a proposed project has beent accepted. Alex's paid a $2,200 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 $6,075 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,400 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 The company paid $1,400 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 $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 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 from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts. 3. Prepare an adjusted trial balance as of December 31, 2020. 4. Prepare an income statement for the three months ended December 31, 2020. 5. Prepare a statement of retained earnings for the three months ended December 31, 2020. 6. Prepare a balance sheet as of December 31, 2020. 7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B. 8. Prepare a post-closing trial balance as of December 31, 2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 9P: During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the...

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