On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The company's initial chart of accounts follows. Account Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Computer Equipment Accounts Payable Number Account S. Rey, Capital 101 106 S. Rey, Withdrawals 126 Computer Services Revenue Wages Expense 128 131 163 Advertising Expense Mileage Expense 167 Miscellaneous Expenses 201 Repairs Expense-Computer Number 301 302 403 623 655 676 677 684 October 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company. October 2 The company paid $3,300 cash for four months' rent. Hint: Debit Prepaid Rent for $3,300. October 3 The company purchased $1,420 of computer supplies on credit from Harris Office Products. October 5 The company paid $2,220 cash for one year's premium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $2,220. October 6 The company billed Easy Leasing $4,800 for services performed in installing a new Web server. October 8 The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3. October 10 The company hired Lyn Addie as a part-time assistant. October 12 The company billed Easy Leasing another $1,400 for services performed. October 15 The company received $4,800 cash from Easy Leasing as partial payment on its account. October 17 The company paid $805 cash to repair computer equipment that was damaged when moving it. October 20 The company paid $1,728 cash for advertisements. October 22 The company received $1,400 cash from Easy Leasing on its account. October 28 The company billed IFM Company $5,208 for services performed. October 31 The company paid $875 cash for Lyn Addie's wages for seven days' work. October 31 S. Rey withdrew $3,600 cash from the company for personal use. November 1 The company paid $320 cash for mileage expenses. November 2 The company received $4,633 cash from Liu Corporation for computer services performed. November 5 The company purchased computer supplies for $1,125 cash from Harris Office Products. November 8 The company billed Gomez Company $5,668 for services performed. November 13 The company agreed to perform future services for Alex's Engineering Company. No work has yet been performed. November 18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill. November 22 The company paid $250 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $250. November 24 The company completed work and sent a bill for $3,950 to Alex's Engineering Company. November 25 The company sent another bill to IFM Company for the past-due amount of $3,000. November 28 The company paid $384 cash for mileage expenses.
On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The company's initial chart of accounts follows. Account Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Computer Equipment Accounts Payable Number Account S. Rey, Capital 101 106 S. Rey, Withdrawals 126 Computer Services Revenue Wages Expense 128 131 163 Advertising Expense Mileage Expense 167 Miscellaneous Expenses 201 Repairs Expense-Computer Number 301 302 403 623 655 676 677 684 October 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company. October 2 The company paid $3,300 cash for four months' rent. Hint: Debit Prepaid Rent for $3,300. October 3 The company purchased $1,420 of computer supplies on credit from Harris Office Products. October 5 The company paid $2,220 cash for one year's premium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $2,220. October 6 The company billed Easy Leasing $4,800 for services performed in installing a new Web server. October 8 The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3. October 10 The company hired Lyn Addie as a part-time assistant. October 12 The company billed Easy Leasing another $1,400 for services performed. October 15 The company received $4,800 cash from Easy Leasing as partial payment on its account. October 17 The company paid $805 cash to repair computer equipment that was damaged when moving it. October 20 The company paid $1,728 cash for advertisements. October 22 The company received $1,400 cash from Easy Leasing on its account. October 28 The company billed IFM Company $5,208 for services performed. October 31 The company paid $875 cash for Lyn Addie's wages for seven days' work. October 31 S. Rey withdrew $3,600 cash from the company for personal use. November 1 The company paid $320 cash for mileage expenses. November 2 The company received $4,633 cash from Liu Corporation for computer services performed. November 5 The company purchased computer supplies for $1,125 cash from Harris Office Products. November 8 The company billed Gomez Company $5,668 for services performed. November 13 The company agreed to perform future services for Alex's Engineering Company. No work has yet been performed. November 18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill. November 22 The company paid $250 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $250. November 24 The company completed work and sent a bill for $3,950 to Alex's Engineering Company. November 25 The company sent another bill to IFM Company for the past-due amount of $3,000. November 28 The company paid $384 cash for mileage expenses.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Question
Transcribed Image Text:S
On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting
services, computer system installations, and custom program development. The company's initial chart of accounts follows.
Account
Cash
Accounts Receivable
Computer Supplies
Prepaid Insurance
Prepaid Rent
Office Equipment
Computer Equipment
Accounts Payable
Number
101
106
126
128
131
163
167
Miscellaneous Expenses
201 Repairs Expense-Computer
Account
S. Rey, Capital
S. Rey, Withdrawals
Computer Services Revenue
Wages Expense
Advertising Expense
Mileage Expense
Number
301
302
403
623
655
676
677
684
October 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company.
October 2 The company paid $3,300 cash for four months' rent. Hint: Debit Prepaid Rent for $3,300.
October 3 The company purchased $1,420 of computer supplies on credit from Harris Office Products.
October 5 The company paid $2,220 cash for one year's premium on a property and liability insurance policy. Hint:
Debit Prepaid Insurance for $2,220.
October 6 The company billed Easy Leasing $4,800 for services performed in installing a new Web server.
October 8 The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3.
October 10 The company hired Lyn Addie as a part-time assistant.
October 12 The company billed Easy Leasing another $1,400 for services performed.
October 15 The company received $4,800 cash from Easy Leasing as partial payment on its account.
October 17 The company paid $805 cash to repair computer equipment that was damaged when moving it.
October 20 The company paid $1,728 cash for advertisements.
October 22 The company received $1,400 cash from Easy Leasing on its account.
October 28 The company billed IFM Company $5,208 for services performed.
October 31 The company paid $875 cash for Lyn Addie's wages for seven days' work.
October 31 S. Rey withdrew $3,600 cash from the company for personal use.
November 1 The company paid $320 cash for mileage expenses.
November 2 The company received $4,633 cash from Liu Corporation for computer services performed.
November 5 The company purchased computer supplies for $1,125 cash from Harris Office Products.
November 8 The company billed Gomez Company $5,668 for services performed.
November 13 The company agreed to perform future services for Alex's Engineering Company. No work has yet been
performed.
November 18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill.
November 22 The company paid $250 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $250.
November 24 The company completed work and sent a bill for $3,950 to Alex's Engineering Company.
November 25 The company sent another bill to IFM Company for the past-due amount of $3,000.
November 28 The company paid $384 cash for mileage expenses.
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performed.
November 18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill.
November 22 The company paid $250 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $250.
November 24 The company completed work and sent a bill for $3,950 to Alex's Engineering Company.
November 25 The company sent another bill to IFM Company for the past-due amount of $3,000.
November 28 The company paid $384 cash for mileage expenses.
November 30 The company paid $1,750 cash for Lyn Addie's wages for 14 days' work.
November 30 S. Rey withdrew $2,000 cash from the company for personal use.
NOVEL
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Required:
1. Prepare journal entries to record each of the above transactions for Business Solutions.
2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them.
3. Prepare a trial balance as of the end of November.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
View transaction list
Prepare journal entries to record each of the above transactions for Business Solutions.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
<
Journal entry worksheet
1
Required 3
2
3
4
5
6
7
8
*****
WULA MAs you ve
27
S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of
office equipment in the company.
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