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Question: After the success of the company’s first two months, Santana Rey continues to operate Business ...
After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2017, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2017) follows:
Business Solutions had the following transactions and events in December 2017.
Dec. 2. Paid $990 cash to Hillside Mall for Business Solutions share of mall advertising cost.
Dec 3. Paid $400 cash for minor repairs to the companys’ computer.
Dec 4 Received $4550 cash from Alex’s Engineering Co. for the receivable from November.
Dec 10. Paid cash to Lyn Addie for six days of work at the rate of $115 per day.
Dec 14. Notified by Alex’s Engineering Co. that business Solutions’ bid of $8000 n a propsed project has been accepted. Alex’s paid a $2100 cash advance to Business Solutions.
Dec 15. Purchased $2000 of computer supplies on credit from Harris Office Products.
Dec 16. Sent a reminder to Gomez Co. to pay the fee for services recorded on Novemebr 8.
Dec 20. Completed a project for Liu Corporation and received $6625.
Dec 22. Took the week off for the holidays.
Dec 26.
Dec 28. Received $3800 cash from Gomez Co on its receivables.
Dec 29. Reimbursed S Rey for business automobile mileage (600 miles at $0.23 per mile)
Dec 31. The company paid $1300 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 $630 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 $115 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 has 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, adjusting entries to the accounts in the ledger.
3. Prepare an adjusted trial balance as of December 31, 2017.
4. Prepare an income statement for the three months ended December 31, 2017.
5. Prepare a statement of owner’s equity for the three months ended December 31, 2017.
6. Prepare a balance sheet as of December 31, 2017.
I need help with this section. Thank you!
101 Cash 38464 106 Accounts receivable 13018 126 Computer supplies 2645 128 Prepaid Insurance 1920 131 Prepaid rent 3200 163 Office equipment 8700 164 Accumulated depreciation – Office equipment 0 167 Computer equipment 20400 168 Accumulated depreciation – Computer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 307 Common stock 66000 318 Retained earning 0 319 Dividends 6100 403 Computer services revenue 34289 612 Depreciation – Office equipment 0 613 Depreciation – Computer equipment 0 623 Wages expense 2525 637 Insurance expense 0 640 Rents expense 0 652 Computer supplies expense 0 655 Advertising expense 1688 676 Mileage expense 674 677 Misc expense 250 684 Repairs expense – Computer 705 100289 100289 Accounts Receivable Cash Date Debit Credit Balance Date Debit Credit Balance 13,018 8,468 4,668 Dec. 01 ec. 02 ec. 03 ec. 04 ec. 10 ec. 14 ec. 20 ec. 28 ec. 29 ec. 31 38,464 Dec. 01 37,474 37,074 41,624 40,934 43,034 49,659 53,459 53,321 52,021 4,550 3,800 990 ec. 04 400 ec. 28 4,550 690 2,100 6,625 3,800 138 1,300 Prepaid Insurance Computer Supplies Debit Date Debit Credit Balance Credit Balance Date 2,645 Dec. 01 ec. 31 1,920 1,440 Dec. 01 ec. 15 ec. 31 480 4,645 630 2,000 4,015Explanation / Answer
1. In the books of Business Solutions :
2-a. Adjusting Entries:
3. Business Solutions
Adjusted Trial Balance
December 31, 2017
4. Business Solutions
Income Statement
For the three months ended December 31, 2017
5. Statement of Owner's Equity
For the three months ended December 31, 2017
Business Solutions
Balance Sheet
December 31, 2017
Date Account Titles Debit Credit 2017 $ $ Dec 2 Advertising Expense 990 Cash 990 Dec 3 Repairs Expense - Computer 400 Cash 400 Dec 4 Cash 4,550 Accounts Receivable 4,550 Dec 10 Wages Expense 690 Cash 690 Dec 14 Cash 2,100 Unearned Computer Service Revenue 2,100 Dec 15 Computer Supplies 2,000 Accounts Payable 2,000 Dec 16 No entry Dec 20 Cash 6,625 Computer Service Revenue 6,625 Dec 28 Cash 3,800 Accounts Receivables 3,800 Dec 29 Mileage Expense 138 Cash 138 Dec 31 Dividends 1,300 Cash 1,300