Question

Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and Its IIst of customers has grown. To accommodate the growth, the accounting system Is modlfied to set up separate accounts for each customer. The following chart of accounts Includes the account number used for each account and any balance as of December 31, 2019. Santana Rey declded to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Recelvable account. This change allows the company to continue using the exlsting chart of accounts.

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1 / 10, n / 30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount Is available on consulting fees. Additional accounts (Nos. 119,413,414,415, and 502 ) are added to Its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow:

The following additional facts ore available for preparing adjustments on Morch 31 prior to financial statement preparation:

a. The Morch 31 amount of computer supplies still available totals $ 2,155 .

b. Prepaid Insurance coverage of $ 708 expired during this 3 -month period.

c. Lyn Addie has not been paid for seven days of work at the rote of $ 215 per day.

d. Prepaid rent of $ 2,505 expired during this 3 -month period.

e. Depreciation on the computer equipment for January 1 through March 31 is $ 1,100.

f. Depreciation on the office equipment for January 1 through March 31 is $ 210.

g. The Morch 31 amount of merchandise inventory still available totals $ 684 .

  

Answer 1

Credit Business Solutions Journal entries Date Account 4-Jan Wages Payable Wages expense Cash Debit $ $ Calculation =215*4 860 215 $ 1,075 $ 24,900 5-Jan Cash Common stock $ 24,900 $ 7,200 7-Jan Merchandise Inventory Accounts Payable $ 7,200 $ 2,758 9-Jan Cash Gomez Co $ 2,758 11-Jan Unearned computer services revenue Alex's Engineering Co Computer services revenue $ $ 1,340 5,370 $ 6,710 $ 4,800 $ 4,800 13-Jan Liu Co Sales Cost of goods sold Merchandise Inventory $ 3,410 $ 3,410 $ 790 15-Jan Merchandise Inventory Cash $ 790 $ 4,120 16-Jan Cash Computer services revenue $ 4,120 $ 7,200 17-Jan Accounts Payable Cash Merchandise Inventory $ $ 7,128 72 =7,200*1% $ 400 20-Jan Sales returns and allowances Liu Co $ 400 22-Jan Cash Sales discounts Liu Co $ $ 4,356 44 -4,400*1% 4,400 =4,800-400 $ $ 501 =496/99 100 24-Jan Accounts Payable Merchandise Inventory $ 501 $ 9,200 26-Jan Merchandise Inventory Accounts Payable $ 9,200 $ 5,840 $ 5,840 26-Jan KC. Inc. Sales Cost of goods sold Merchandise Inventory $ 4,460 $ 4,460 $ 2,150 =215*10 $ 2,150 31-Jan Wages expense Cash Feb 1-Feb Prepaid rent Cash $ 2,505 $ 2,505 $ 8,699 3-Feb Accounts Payable Cash Merchandise Inventory $ $ =9,200-501 8,612 87 -8,699*1% $ 400 5-Feb Advertising expense Cash $ 400 $ 5,370 11-Feb Cash Alex's Engineering Co $ 5,370 $ 4,650 15-Feb Dividends Cash $ 4,650 $ 3,370 $ 3,370 23-Feb Delta Co Sales Cost of goods sold Merchandise Inventory $ 2,490 $ 2,490 $ 1,720 =215*8 26-Feb Wages expense Cash $ 1,720 $ 224 $ 224 27-Feb Mileage expense Cash March 8-Mar Computer supplies Accounts Payable $ 2,910 $ 2,910 $ 3,370 9-Mar Cash Delta Co $ 3,370 $ 870 11-Mar Reapirs expense - Computer Cash $ 870 $ 5,370 16-Mar Cash Computer services revenue $ 5,370 $ 4,200 =1,290+2,910 19-Mar Accounts Payable Cash $ 4,200 $ 9,087 24-Mar Easy Leasing Computer services revenue $ 9,087 $ 2,890 $ 2,890 25-Mar Wildcat Services Sales Cost of goods sold Merchandise Inventory $ 2,152 $ 2,152 $ 2,310 $ 2,310 30-Mar IFM CO Sales Cost of goods sold Merchandise Inventory $ 1,248 $ 1,248 $ 320 $ 320 31-Mar Mileage expense Cash Adjusting entries 31-Mar Computer supplies expense Computer supplies $ 1,465 =710+2,910-2, 155 $ 1,465 $ 708 31-Mar Insurance expense Prepaid Insurance $ 708 $ 1,505 =215*7 31-Mar Wages expense Wages Payable $ 1,505 $ 2,505 31-Mar Rent expense Prepaid rent $ 2,505 $ 1,100 31-Mar Depreciation expense - Computer equipment Accumulated Depreciation - Computer equipment $ 1,100 $ 210 31-Mar Depreciation expense - Office equipment Accumulated Depreciation - Office equipment $ 210 $ 2,086 31-Mar Cost of goods sold Merchandise Inventory $ =2,770-684 2,086 Unadj Bal - $684

Credit Date Debit Date Credit Alex's Engineering Co-AR Op bal $ . 11-Jan $ 5,370 11-Feb $ 5,370 Date Debit Date Credit Wildcat Services - AR Op bal $ . 25-Mar $ 2,890 Date Debit Date Easy Leasing - AR Op bal $ . 24-Mar $ 9,087 Business Solutions Ledger accounts Date Debit Date Credit Cash Op bal $ 48,512 4-Jan $ 1,075 5-Jan $ 24,900 15-Jan $ 790 9-Jan $ 2,758 17-Jan $ 7,128 16-Jan $ 4,120 31-Jan $ 2,150 22-Jan $ 4,356 1-Feb $ 2,505 11-Feb $ 5,370 3-Feb $ 8,612 9-Mar $ 3,370 5-Feb $ 400 16-Mar $ 5,370 15-Feb $ 4,650 26-Feb $ 1,720 27-Feb $ 224 11-Mar $ 870 19-Mar $ 4,200 31-Mar $ 320 Bal. $ $ 64,112 IFM CO - AR 3,060 2,310 Bal. $ - Liu Co - AR Op bal $ . 13-Jan $ 4,800 20-Jan $ 22-Jan $ Op bal Op bal $ 30-Mar $ $ 2,890 Bal. $ 9,087 Gomez CO - AR Delta CO - AR 2,758 9-Jan $ 2,758 Op bal $ . 23-Feb $ 3,370 9-Mar $ 3,370 400 4,400 Bal. $ Bal. $ 5,370 KC. Inc. - AR . 5,840 Dream Inc. -AR - Bal. $ Computer supplies Op bal $ 710 8-Mar $ 2,910 Op bal $ Op bal 26-Jan $ $ Bal. $ - Merchandise Inventory Op bal $ . 7-Jan $ 7,200 13-Jan $ 3,410 15-Jan $ 790 17-Jan $ 72 26-Jan $ 9,200 26-Jan $ 4,460 24-Jan $ 501 3-Feb $ 87 23-Feb $ 2,490 25-Mar $ 2,152 30-Mar $ 1,248 Bal. $ Bal. Bal. 5,840 Office Equip 8,130 $ . Accum. Depr.- Office Equip Op bal $ $ 2,770 Computer Equipment $ 21,100 Bal. $ 3,620 Accum. Depr. - Computer Equip Op bal $ 1,100 Op bal $ 210 Op bal Bal. $ 210 $ 1,100 $ 8,130 Prepaid Insurance $ 2,124 Bal. Prepaid rent Op bal $ 835 1-Feb $ 2,505 Bal. $ 21,100 Accounts Payable 17-Jan $ 7,200 Op bal $ 1,290 24-Jan $ 501 7-Jan $ 7,200 3-Feb $ 8,699 26-Jan $ 9,200 19-Mar $ 4,200 8-Mar $ 2,910 Bal. Wages Payable 4-Jan $ 860 Op bal Op bal $ 860 Bal. $ . S Bal. $ 2,124 Unearned computer services revenue 11-Jan $ 1,340 Op bal $1,340 $ 3,340 Common stock Op bal 5-Jan Bal. Retained earnings Op bal Bal. Dividends 15-Feb $ 4,650 $ 9,160 $ $ 73,269 24,900 Bal. Bal. $ 98,169 Bal. $ 9,160 Bal. $ 4,650

Sales returns and allowances 20-Jan $ 400 Sales discounts 22-Jan $ 44 Computer services revenue 11-Jan $ 6,710 16-Jan $ 4,120 16-Mar $ 5,370 24-Mar $ 9,087 Sales 13-Jan $ 26-Jan $ 23-Feb $ 25-Mar $ 30-Mar $ 4,800 5,840 3,370 2,890 2,310 $ 25,287 Bal. $ 19,210 Depreciation expense - Office equip Bal. $ 400 Depreciation expense-Computer equip Bal. Cost of goods sold 13-Jan $ 3,410 26-Jan $ 4,460 23-Feb $ 2,490 25-Mar $ 2,152 30-Mar $ 1,248 Bal. $ 44 Wages expense 4-Jan $ 215 31-Jan $ 2,150 26-Feb $ 1,720 Bal. Bal. $ 13,760 Insurance expense $ - Computer supplies expense Rent expense Bal. $ 4,085 Advertising expense 5-Feb $ 400 Bal. Bal. $ 400 Miscellaneous expense Bal. $ Mileage expense 27-Feb $ 224 31-Mar $ 320 Bal. Reapirs expense - Computer 11-Mar $ 870 Bal. $ 544 Bal. $ 870

Business Solutions As of Mar 31, 2020 Unadjusted TB Debit Credit 64,112 As of Mar 31, 2020 Adjustments Debit Credit As of Mar 31, 2020 Adjusted TB Debit Credit 64,112 2,890 9,087 2,890 9,087 5,370 5,370 5,840 5,840 684 2,770 3,620 2,124 3,340 8,130 2,086 1,465 708 2,505 2,155 1,416 835 8,130 210 210 420 21,100 21,100 1,100 1,100 2,200 No. Account Title 101 Cash 106.1 Alex's Engineering Co 106.2 Wildcat Services 106.3 Easy Leasing 106.4 IFM CO 106.5 Liu Co 106.6 Gomez Co 106.7 Delta Co 106.8 KC. Inc. 106.9 Dream Inc. 119 Merchandise Inventory 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 413 Sales 414 Sales returns and allowances 415 Sales discounts 502 Cost of goods sold 612 Depreciation expense - Office equipment 613 Depreciation expense - Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expense 684 Reapirs expense - Computer 1,505 1,505 98,169 9,160 98,169 9,160 4,650 4,650 25,287 19,210 25,287 19,210 400 44 13,760 4,085 2,086 210 1,100 1,505 708 2,505 1,465 400 44 15,846 210 1,100 5,590 708 2,505 1,465 400 544 400 544 870 153,136 870 155,951 153,136 9 ,579 9,579 155,951