After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows. No. Account Title Debit Credit 101 Cash $ 38,364 106 Accounts receivable 12,818 126 Computer supplies 2,545 128 Prepaid insurance 1,920 131 Prepaid rent 2,960 163 Office equipment 8,000 164 Accumulated depreciation—Office equipment $ 0 167 Computer equipment 23,200 168 Accumulated depreciation—Computer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 307 Common stock 68,000 318 Retained earnings 0 319 Dividends 5,700 403 Computer services revenue 33,069 612 Depreciation expense—Office equipment 0 613 Depreciation expense—Computer equipment 0 623 Wages expense 2,275 637 Insurance expense 0 640 Rent expense 0 652 Computer supplies expense 0 655 Advertising expense 1,658 676 Mileage expense 634 677 Miscellaneous expenses 210 684 Repairs expense—Computer 785 Totals $ 101,069 $ 101,069 Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $970 cash to Hillside Mall for Business Solutions’ share of mall advertising costs. 3 Paid $470 cash for minor repairs to the company’s computer. 4 Received $4,650 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 $120 per day. 14 Notified by Alex’s Engineering Co. that Business Solutions’ bid of $7,700 on a proposed project has been accepted. Alex’s paid a $2,000 cash advance to Business Solutions. 15 Purchased $1,300 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 $5,875 cash. 22–26 Took the week off for the holidays. 28 Received $3,600 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.31 per mile). 31 The company paid $1,100 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. The December 31 inventory count of computer supplies shows $630 still available. Three months have expired since the 12-month insurance premium was paid in advance. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. 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, 2019.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2019) follows.

 

No. Account Title Debit Credit
101 Cash $ 38,364      
106 Accounts receivable   12,818      
126 Computer supplies   2,545      
128 Prepaid insurance   1,920      
131 Prepaid rent   2,960      
163 Office equipment   8,000      
164 Accumulated depreciation—Office equipment       $ 0
167 Computer equipment   23,200      
168 Accumulated depreciation—Computer equipment         0
201 Accounts payable         0
210 Wages payable         0
236 Unearned computer services revenue         0
307 Common stock         68,000
318 Retained earnings         0
319 Dividends   5,700      
403 Computer services revenue         33,069
612 Depreciation expense—Office equipment   0      
613 Depreciation expense—Computer equipment   0      
623 Wages expense   2,275      
637 Insurance expense   0      
640 Rent expense   0      
652 Computer supplies expense   0      
655 Advertising expense   1,658      
676 Mileage expense   634      
677 Miscellaneous expenses   210      
684 Repairs expense—Computer   785      
  Totals $ 101,069   $ 101,069
 

 

Business Solutions had the following transactions and events in December 2019.   

 

Dec. 2   Paid $970 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.
  3   Paid $470 cash for minor repairs to the company’s computer.
  4   Received $4,650 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 $120 per day.
  14   Notified by Alex’s Engineering Co. that Business Solutions’ bid of $7,700 on a proposed project has been accepted. Alex’s paid a $2,000 cash advance to Business Solutions.
  15   Purchased $1,300 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 $5,875 cash.
  22–26   Took the week off for the holidays.
  28   Received $3,600 cash from Gomez Co. on its receivable.
  29   Reimbursed S. Rey for business automobile mileage (500 miles at $0.31 per mile).
  31   The company paid $1,100 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.
 

  1. The December 31 inventory count of computer supplies shows $630 still available.
  2. Three months have expired since the 12-month insurance premium was paid in advance.
  3. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day.
  4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
  5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
  6. 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, 2019.
4. Prepare an income statement for the three months ended December 31, 2019.
5. Prepare a statement of retained earnings for the three months ended December 31, 2019.
6. Prepare a balance sheet as of December 31, 2019.
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, 2019.

Req 1
Req 2A
Req 2B
Req 3
Req 4
Req 5
Req 6
Req 7
Req E
Prepare journal entries to record each of the December transactions and events for Business Solutions. (If r
transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
1
2
3
4
5 6
7
11
Paid $470 cash for minor repairs to the company's computer.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Dec 03
Record entry
Clear entry
View general journal
Transcribed Image Text:Req 1 Req 2A Req 2B Req 3 Req 4 Req 5 Req 6 Req 7 Req E Prepare journal entries to record each of the December transactions and events for Business Solutions. (If r transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 11 Paid $470 cash for minor repairs to the company's computer. Note: Enter debits before credits. Date General Journal Debit Credit Dec 03 Record entry Clear entry View general journal
Req 1
Req 2A
Req 2B
Req 3
Req 4
Req 5
Req 6
Req 7
Req 8
Prepare journal entries to record each of the December transactions and events for Business Solutions. (If no entry is required for a
transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
4 5 6 7 8
11
>
Paid $970 cash to Hillside Mall for Business Solutions' share of mall advertising
costs.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Dec 02
Record entry
Clear entry
View general journal
Transcribed Image Text:Req 1 Req 2A Req 2B Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Prepare journal entries to record each of the December transactions and events for Business Solutions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 4 5 6 7 8 11 > Paid $970 cash to Hillside Mall for Business Solutions' share of mall advertising costs. Note: Enter debits before credits. Date General Journal Debit Credit Dec 02 Record entry Clear entry View general journal
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

Can you also do three-eight??

Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education