Question

Serial Problem Business Solutions LO P1, P2, P3, P4, P5
Serial Problem Business Solutions LO P1, P2, P3, P4, P5 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018. unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows. Credit Debit $ 38,664 13,518 2,545 1,860 3,260 8,300 163 Off 22,800 168 201 Accou No. Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent Office equipment Accumulated depreciation-Office equipment 167 Computer equipment Accumulated depreciation-Computer equipment 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 443 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 expenses 684 Repairs expense-Computer Totals 65,000 6,500 37,974 2,300 1,718 614 160 735 $102,974 $102,974

Answer 1

Business Solutions Req 1 Journal entries Date Account 2-Dec Advertising expense Credit Calculation Debit $ 950 Cash $ 950 $ 480 3-Dec Repairs expense-Computer Cash $ 480 $ 4,350 4-Dec Cash Accounts Receivable $ 4,350 $ 660 =6*110 10-Dec Wages expense Cash $ 660 $ 2,100 14-Dec Cash Unearned Computer Services Revenue $ 2,100 $ 1,400 15-Dec Computer Supplies Accounts Payable $ 1,400 16-Dec No entry $ 6,325 20-Dec Cash Computer Services Revenue $ 6,325 Dec 22-26 No entry $ 3,700 28-Dec Cash Accounts Receivable $ 3,700 $ 88 -400*0.22 29-Dec Mileage expense Cash $ 88 $ 1,100 31-Dec Dividends Cash $ 1,100

Req 2-a Adjusting entries 31-Dec Computer supplies expense Computer Supplies $ 3,295 =2,545+1,400-650 $ 3,295 $ 465 =1,860/12*3 31-Dec Insurance expense Prepaid Insurance $ 465 $ 440 -4*110 31-Dec Wages expense Wages Payable $ 440 $ 1,425 =22,800/4 yrs *3/12 31-Dec Depreciation expense-Computer Equipment Accumulated Depreciation-Computer Equipment $ 1,425 $ 415 =8,300/5 yrs *3/12 31-Dec Depreciation expense-Office Equipment Accumulated Depreciation Office Equipment $ 415 $ 2,445 =3,260/4*3 31-Dec Rent expense Prepaid Rent $ 2,445

Business Solutions Req 2-b T Accounts Date Debit Credit Balance Date Debit Credit Balance Date Debit Credit Balance Date Debit Credit Balance Cash Accounts Receivable Computer Supplies Prepaid Insurance Op bal $ 38,664 $38,664 Op bal $13,518 $ 13,518 Op bal $ 2,545 $ 2,545 Op bal $ 1,860 $ 1,860 2-Dec $ 950 $ 37,714 4-Dec $ 4,350 $ 9,168 15-Dec $ 1,400 $ 3,945 31-Dec $ 465 $ 1,395 3-Dec $ 480 $37,234 28-Dec $ 3,700 $ 5,468 31-Dec $ 3,295 $ 650 4-Dec $ 4,350 $ 41,584 10-Dec $ 660 $ 40,924 14-Dec $ 2,100 $ 43,024 20-Dec $ 6,325 $ 49,349 28-Dec $ 3,700 $53,049 29-Dec $ 88 $ 52,961 31-Dec $ 1,100 $ 51,861 Office Equip Accum. Depr. - Office Equip Computer Equipment Accum. Depr. - Computer Equip Op bal $ 8,300 $ 8,300 31-Dec $ 415 $ 415 Op bal $ 22,800 $ 22,800 31-Dec $ 1,425 $ 1,425 Prepaid Rent Accounts Payable Wages Payable Unearned Computer Services Revenue Op bal $ 3,260 $ 3,260 15-Dec $ 1,400 $ 1,400 31-Dec $ 440 $ 440 14-Dec $ 2,100 $ 2,100 31-Dec $ 2,445 $ 815 Common Stock Dividends Income Summary Retained Earnings Op bal $ 65,000 $ 65,000 Op bal $6,500 $ 6,500 31-Dec $ 44,299 $ 44,299 Op bal $ - $ . 31-Dec $ 1,100 $ 7,600 31-Dec $ 16,190 $ 28,109 31-Dec $ 28,109 $ 28,109 31-Dec $ 7,600 $ - 31-Dec $ 28,109 31-Dec $ 7,600 $ 20,509 Computer Services Revenue Depreciation expense-Office Equipment Depreciation expense-Computer Equip Wages expense Op bal $ 37,974 $ 37,974 31-Dec $ 415 $ 415 31-Dec $ 1,425 $ 1,425 Op bal $ 2,300 $ 2,300 20-Dec $ 6,325 $ 44,299 31-Dec $ 415 $ - 31-Dec $ 1,425 $ - 10-Dec $ 660 $ 2,960 31-Dec $ 44,299 $ - 31-Dec $ 440 $ 3,400 31-Dec $ 3,400 $ - Insurance expense Rent expense Computer supplies expense Advertising expense 31-Dec $ 465 $ 465 31-Dec $ 2,445 $ 2,445 31-Dec $ 3,295 $ 3,295 Op bal $ 1,718 $ 1,718 31-Dec $ 465 $ - 31-Dec $ 2,445 $ - 31-Dec $ 3,295 $ - 2-Dec $ 950 $ 2,668 31-Dec $ 2,668 $ - Mileage expense Miscellaneous expense Repairs expense-Computer Op bal $ 614 $ 614 Op bal $ 160 $ 160 Op bal $ 735 $ 735 29-Dec $ 88 $ 702 31-Dec $ 160 $ - 3-Dec $ 480 $ 1,215 31-Dec $ 702 $ - 31-Dec $ 1,215 $ .

Business Solutions Account Names 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 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 expense Repairs expense-Computer Totals Reg 3 Adjusted TB Debit Credit 51,861 5,468 650 1,395 815 8,300 415 22,800 1,425 1,400 440 2,100 65,000 7,600 44,299 415 1,425 3,400 465 2,445 3,295 2,668 702 160 1,215 115,079 115,079

44,299 Req 4 Business Solutions Income Statement For three months ended Dec 31, 2018 Computer Services Revenue Expenses Depreciation expense-Office Equipment Depreciation expense-Computer Equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expense Repairs expense-Computer Total Expenses Net Income 415 1,425 3,400 465 2,445 3,295 2,668 702 160 1,215 16,190 28,109 Req 5 Statement of Retained Earnings For three months ended Dec 31, 2018 Retained Earnings, Oct 1, 2018 Net Income Subtotal Less Dividends Retained Earnings, Dec 31, 2018 28,109 28,109 (7,600) 20,509

Req6 Business Solutions Balance Sheet As of Dec 31, 2018 Assets Current Assets Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Total Current Assets 51,861 5,468 650 1,395 815 60,189 Fixed Assets Office Equipment Accumulated Depreciation Office Equipment Computer Equipment Accumulated Depreciation-Computer Equipment Total Fixed Assets Total Assets 8,300 (415) 7,885 22,800 (1,425) 21,375 29,260 89,449 Liabilities & Equity Liabilities Accounts Payable Wages Payable Unearned Computer Services Revenue Total Liabilities 1,400 440 2,100 3,940 Equity Common Stock Retained Earnings Total Equity Total Liabilities & Equity 65,000 20,509 85,509 89,449

Req7 Closing entries 31-Dec Computer Services Revenue Income Summary $ 44,299 $ 44,299 $ 16,190 31-Dec Income Summary Depreciation expense-Office Equipment Depreciation expense-Computer Equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expense Repairs expense-Computer $ $ $ $ $ $ $ $ $ $ 415 1,425 3,400 465 2,445 3,295 2,668 702 160 1,215 $ 28,109 -44,299-16,190 31-Dec Income Summary Retained Earnings $ 28,109 $ 7,600 31-Dec Retained Earnings Dividends $ 7,600

Business Solutions Account Names 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 Services Revenue Common Stock Retained Earnings Totals Req8 Post Closing TB Debit Credit 51,861 5,468 650 1,395 815 8,300 415 22,800 1,425 1,400 440 2,100 65,000 20,509 91,289 91,289