Question

Accounting 2140 - Comprehensive Problem On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2019. 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 Credit 101 106 126 128 131 163 164 Debit $ 38,664 13.018 2.545 1.920 3,140 8,100 21,600 168 201 210 236 307 318 319 403 612 613 68,000 Cash Accounts receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation Computer equipment Accounts payable Wages payable Uneamed computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expense Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense Computer Totals 6,100 32.779 623 0 637 2,325 0 640 652 655 676 677 MB 684 1.708 704 230 725 $100,779 $100,779 Business Solutions had the following transactions and events in December 2019 Dec. 2 3 4 10 14 15 Paid $1,010 cash to Hillside Mall for Business Solutions' share of mall advertising costs. Paid $500 cash for minor repairs to the company's computer. - Received $4,950 cash from Alex's Engineering Co. for the receivable from November Paid cash to Lyn Addle for six days of work at the rate of $110 per day. Notified by Alex's Engineering Co that Business Solutions' bid of $7,800 on a proposed project has been accepted. Alex's paid a $2,100 cash advance to Business Solutions. Purchased $2,000 of computer supplies on credit from Harris Office Products. Sent a reminder to Gomez Co to pay the fee for services recorded on November 8. Completed a project for Liu Corporation and received $6,575 cash. Took the Took the week off for the holidays. Received $3,600 cash from Gomez Co. on its receivable. Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile) The company paid $1,200 cash in dividends. 22-26 28 29 31

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will ge Date Account Debit Credit $ 1,010 Dec 2 Dec 2 Advertising Expense Cash (To record advertising Expense) $ 1,010 Dec 3 $ 500 Dec 3 Repairs Expense-Computer Cash (To record repair Expense) $ 500 Cash $ 4,950 Dec 4 Dec 4 $ 4,950 Accounts Receivable (To record receipt of amount) $ 660 Dec 10 Dec 10 Wages Expense Cash (To record wages expense) $ 660 $ 2,100 Dec 14 Dec 14 Cash Unearned Computer Service Revenue (To record advance received) $ 2,100 $ 2,000 Dec 15 Dec 15 Computer Supplies Accounts Payable (To record purchase of supplies) $ 2,000 Dec 16 Dec 16 No Entry $ 6,575 Dec 20 Dec 20 Cash Computer Service Revenue (To record service provided) $ 6,575 $ 3,600 Dec 28 Dec 28 $ 3,600 Accounts Receivable (To record receipt of collection) $ 192 Dec 29 Dec 29 Mileage Expense Cash (To record mileage expense) $ 192 $ 1,200 Dec 31 Dec 31 Dividend Cash (To record payment of dividend) $ 1,200

Adjusting: Date Account Debit Credit $ 3,885 2545+2000-660 Computer Supplies Expense Computer Supplies (To record supplies used) $ 3,885 $ 480 1920/12*3 Insurance Expense Prepaid Insurance (To record expired insurance) $ 480 $ 440 110*4 Wages Expense Wages Payable (To record wages accrued) $ 440 $ 405 8100*1/5*3/12 Depreciation Expense-Office Equipment Accumulated Depreciation Office Equipment (To record depreciation) $ 405 $ 1,350 21600*1/4*3/12 Depreciation Expense-Computer Equipment Accumulated Depreciation-Computer Equipment (To record depreciation) $ 1,350 $ 2,355 3140/4*3 Rent Expense Prepaid Rent (To record rent expense) $ 2,355 Closing: Date Account Debit Credit c1 $ 39,354 Computer Service Revenue Income Summary (To close revenue account) $ 39,354 c2 $ 16,969 Income Summary Depreciation Expense-Computer Equipment Depreciation Expense-Office Equipment Wages Expense Insurance Expense Rent Expense Computer Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expense Repairs Expense-Computer (To close expense account) $ 1,350 $ 405 $ 3,425 $ 480 $ 2,355 $ 3,885 $ 2,718 $ 896 $ 230 $ 1,225 c3 $ 22,385 Income Summary Retained Earning (To close income summary account) $ 22,385 04 $ 7,300 Retained Earning Dividends (To close dividend account) $ 7,300

Beginning Debit Credit $ 38,664 $ 13,018 $ 2,545 $ 1,920 $ 3,140 $ 8,100 Account Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Accumulated Depreciation Office Equipment Computer Equipment Accumulated Depreciation-Computer Equipment Accounts Payable wages Payable Unearned Computer Service Revenue Common Stock Retained Earning Dividend Computer Service Revenue Depreciation Expense-Computer Equipment Depreciation Expense-Office Equipment Wages Expense Insurance Expense Rent Expense Computer Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expense Repairs Expense-Computer Dec Adjusted Debit Credit Debit Credit $ 13,663 $ 52,327 $ 8,550 $ 4,468 $ 1,885 $ 660 $ 480 $ 1,440 $ 2,355 $ 785 $ 8,100 $ 405 $ 405 $ 21,600 $ 1,350 $ 1,350 $ 2,000 $ 2,000 $ 440 $ 440 $ 2,100 $ 2,100 $ 68,000 Post Closing Debit Credit $ 52,327 $ 4,468 $ 660 $ 1,440 $ 785 $ 8,100 $ 405 $ 21,600 $ 1,350 $ 2,000 $ 440 $ 2,100 $ 68,000 $ 15,085 $ 21,600 $ 68,000 $ 6,100 $ 1,200 $ 7,300 $ 32,779 $ 6,575 $ 39,354 $ 2,325 $ 1,350 $ 405 $ 1,100 $ 480 $ 2,355 $ 3,885 $ 1,010 $ 192 $ $ $ $ $ $ $ $ $ $ 1,350 405 3,425 480 2,355 3,885 2,718 896 230 1,225 $ 1,708 704 230 725 $ 500 Total $ 100,779 $ 100,779 $ 26,140 $ 26,140 $ 113,649 $ 113,649 $ 89,380 $ 89,380 Income Statement: $ 39,354 $ $ $ Computer Service Revenue Depreciation Expense-Computer Equipment Depreciation Expense-Office Equipment Wages Expense Insurance Expense Rent Expense Computer Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expense Repairs Expense-Computer Net income $ $ $ $ $ $ 1,350 405 3,425 480 2,355 3,885 2,718 896 230 1,225 $ $ 16,969 22,385

Statement of Retained Earning Beginning Retained Earning Add: Net Income Less: Dividend Ending Retained Earning $ $ $ $ . 22,385 7,300 15,085 Balance Sheet: Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent $ $ $ $ $ 52,327 4,468 660 1,440 785 59,680 7,695 $ $ $ $ Total Current Assets Office Equipment Accumulated Depreciation Office Equipment Computer Equipment Accumulated Depreciation-Computer Equipment Total Assets Current Liabilities Accounts Payable wages Payable Unearned Computer Service Revenue $ 8,100 -405 $ 21,600 -1,350 $ $ 20,250 87,625 $ $ $ 2,000 440 2,100 Current Liabilities $ 4,540 Total liabilities Common Stock Retained Earning $ $ $ 4,540 68,000 15,085 Total stockholders' equity Total liabilities and stockholders' equity $ $ 83,085 87,625

Ledger: Account Accounts Payable Date Debit Credit Dec 1 Balance $ - $ 2,000 Dec 15 $ 2,000 Accounts Receivable $ 13,018 Beginning Dec 4 Dec 28 $ $ $ 13,018 4,950 $ 8,068 3,600 $ 4,468 Accumulated Depreciation-Computer Equipmel Dec 1 $ 1,350 $ 1,350 Accumulated Depreciation Office Equipment Dec 1 $ 405 $ - 405 $ Advertising Expense Beginning Dec 2 $ $ 1,708 1,010 $ $ 1,708 2,718 Cash $ 38,664 $ $ 4,950 $ Dec 1 Dec 2 Dec 3 Dec 4 Dec 10 Dec 14 Dec 20 Dec 28 Dec 29 Dec 31 $ 38,664 1,010 $ 37,654 660 $ 36,994 $ 41,944 500 $ 41,444 $ 43,544 $ 50,119 $ 53,719 192 $ 53,527 1,200 $ 52,327 $ $ $ 2,100 6,575 3,600 $ Computer Service Revenue Beginning Dec 20 $ $ 32,779 $ 32,779 6,575 $ 39,354

Computer Supplies Beginning Dec 15 $ $ 2,545 2,000 $ 2,545 $ 4,545 3,885 $ 660 $ Computer Supplies Expense $ 3,885 $ 3,885 Depreciation Expense-Computer Equipment e $ 1,350 $ 1,350 Depreciation Expense-Office Equipment $ 405 $ 405 Insurance Expense $ 480 $ 480 Mileage Expense Beginning Dec 29 $ $ 704 192 $ $ 704 896 Prepaid Insurance Beginning $ 1,920 $ $ 480 $ 1,920 1,440 Prepaid Rent Beginning $ 3,140 $ 3,140 2,355 $ 785 $ Rent Expense $ 2,355 $ 2,355 Repairs Expense-Computer Beginning Dec 3 $ $ 725 500 $ $ 725 1,225 Dividends Beginning Dec 31 $ $ 6,100 1,200 $ $ 6,100 7,300 Unearned Computer Service Revenue Dec 14 $ 2,100 $ 2,100 Wages Expense Beginning Dec 10 $ $ $ 2,325 660 440 $ 2,325 $ 2,985 $ 3,425 Wages Payable $ 440 $ 440