After the success of the company\'s first two months, Santana Rey continues to o
ID: 2605272 • Letter: A
Question
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. No. Account Title Debit $ 38,264 13,018 2,545 1,920 3,020 8,200 Credit 101 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 Depreciation expense Office equipment 613 Depreciation expense Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 72,000 5,700 28,459 2,175 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Misce1laneous expenses 684 Repairs expense-Computer 1,678 604 180 755 Totals $100,459 $100,459 Business Solutions had the following transactions and events in December 2017.Explanation / Answer
Journal entries for Dec 2017
Date Account Title Debit Credit 2-Dec Advertising expense 955 Cash 955 3 Repairs expense-Computer 470 Cash 470 4 Cash 4050 Accounts Receivable 4050 10 Wages expense 720 Cash 720 14 Cash 1800 Unearned computer services revenue 1800 15 Computer supplies 1300 Accounts payable 1300 16 NO ENTRY 20 Cash 6525 Computer services revenue 6525 28 Cash 3500 Accounts Receivable 3500 29 Mileage expense 145 Cash 145 31 Dividends 1400 Cash 1400 31-Dec Adjusting Entries a. Computer Supplies expense 3215 Computer supplies 3215 (2545+1300-630) b. Insurance expense 480 Prepaid Insurance 480 (1920/12*3) c. Wages expense 480 Wages payable 480 d. Depreciation expense-Computer equipment 1400 Accumulated depn.- Computer equipment 1400 (22400/4/12*3) e. Depreciation expense-Office equipment 410 Accumulated depn.- Office equipment 410 (8200/5/12*3) f. Rent expense 2265 Prepaid rent 2265 (3020/4*3) 29115 29115 LEDGER ACCOUNTS NET LEDGER Bal. Debit Credit Debit Credit Accounts payable 1300 1300 Beg. Balance 13018 Accounts Receivable 4050 Accounts Receivable 3500 5468 Accumulated depn.- Computer equipment 1400 1400 Accumulated depn.- Office equipment 410 410 Beg. Balance 1678 2-Dec Advertising expense 955 2633 Beg. Balance 38264 Cash 955 Cash 470 4 Cash 4050 Cash 720 14 Cash 1800 20 Cash 6525 28 Cash 3500 Cash 145 Cash 1400 50449 Common stock Beg. Balance 72000 72000 Computer equipment Beg. Balance 22400 22400 Beg. Balance 28459 Computer services revenue 6525 34984 Beg. Balance 2545 15 Computer supplies 1300 a. Computer Supplies 3215 630 a. Computer Supplies expense 3215 3215 d. Depreciation expense-Computer equipment 1400 1400 e. Depreciation expense-Office equipment 410 410 Beg. Balance 5700 31 Dividends 1400 7100 b. Insurance expense 480 480 Beg. Balance 604 29 Mileage expense 145 749 Miscellaneous expense Beg. Balance 180 180 Office equipment Beg. Balance 8200 8200 Beg. Balance 1920 Prepaid Insurance 480 1440 Beg. Balance 3020 Prepaid rent 2265 755 f. Rent expense 2265 2265 Beg. Balance 755 3 Repairs expense-Computer 470 1225 Unearned computer services revenue 1800 1800 Beg.balance 2175 10 Wages expense 720 c. Wages expense 480 3375 Wages payable 480 480 129574 129574 112374 112374 Adjusted TRIAL BALANCE as on Dec 31 Cash 50449 Accounts Receivable 5468 Computer supplies 630 Prepaid Insurance 1440 Prepaid rent 755 Office equipment 8200 Accumulated depn.- Office equipment 410 Computer equipment 22400 Accumulated depn.- Computer equipment 1400 Accounts payable 1300 Wages payable 480 Unearned computer services revenue 1800 Common stock 72000 Retained Earnings Dividends 7100 Computer services revenue 34984 Depreciation expense-Office equipment 410 Depreciation expense-Computer equipment 1400 Wages expense 3375 Insurance expense 480 Rent expense 2265 Computer Supplies expense 3215 Advertising expense 2633 Mileage expense 749 Miscellaneous expense 180 Repairs expense-Computer 1225 Total 112374 112374 Income statement for the qtr. Ended Dec.31 Computer services revenue 34984 Less: Operating expenses Depreciation expense-Office equipment 410 Depreciation expense-Computer equipment 1400 Wages expense 3375 Insurance expense 480 Rent expense 2265 Computer Supplies expense 3215 Advertising expense 2633 Mileage expense 749 Miscellaneous expense 180 Repairs expense-Computer 1225 15932 Net income 19052 Retained Earnings as at Dec 31,2017 Current year Net Income 19052 Less: Dividends 7100 Closing balance 11952 Balance Sheet as at Dec. 31 Assets Current assets Cash 50449 Accounts Receivable 5468 Computer supplies 630 Prepaid Insurance 1440 Prepaid rent 755 Total current assets 58742 Fixed assets Office equipment 8200 Accumulated depn.- Office equipment -410 7790 Computer equipment 22400 Accumulated depn.- Computer equipment -1400 21000 Total assets 87532 Liabilities & Equity Liabilities Current Liabilities Accounts payable 1300 Wages payable 480 Unearned computer services revenue 1800 Total Current Liabilities 3580 Equity Common stock 72000 Retained Earnings 11952 Total equity 83952 Total Liabilities & Equity 87532 Closing Journal Entries Computer services revenue 34984 Income summary 34984 Income summary 15932 Depreciation expense-Office equipment 410 Depreciation expense-Computer equipment 1400 Wages expense 3375 Insurance expense 480 Rent expense 2265 Computer Supplies expense 3215 Advertising expense 2633 Mileage expense 749 Miscellaneous expense 180 Repairs expense-Computer 1225 Income summary 19052 Retained Earnings 19052 Retained Earnings 7100 Dividends 7100 Post-closing Trial Balance as on Dec 31 Cash 50449 Accounts Receivable 5468 Computer supplies 630 Prepaid Insurance 1440 Prepaid rent 755 Office equipment 8200 Accumulated depn.- Office equipment 410 Computer equipment 22400 Accumulated depn.- Computer equipment 1400 Accounts payable 1300 Wages payable 480 Unearned computer services revenue 1800 Common stock 72000 Retained Earnings 11952 Total 89342 89342