Question

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. Credit Debit $ 38,264 12,718 2,645 1,980 3,120 8,600 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 23,200 66,000 Account Title 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 expenses Repairs expense-Computer Totals 5,900 36,174 2,450 613 623 637 640 652 655 676 677 684 1,648 674 240 735 $102,174 $102,174 Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $945 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $400 cash for minor repairs to the company's computer. 4 Received $4,550 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $110 per day. 14 Notified by Alex's Engineering Co. that Business Solutions bid of $7,800 on a proposed project has been accepted. Alex's paid a $2,500 cash advance to Business Solutions. 15 Purchased $1,700 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 20 Completed a project for Liu Corporation and received $6,525 cash. 22- Took the week off for the holidays. 26 28 Received $3,500 cash from Gomez Co. on its receivable. 29 Reimbursed s. Rey for business automobile mileage (500 miles at $0.27 per mile). 31 The company paid $1,200 cash in dividends.

Answer 1

Part 1: Date Dec-02 General Journal Advertising expense Cash Debit Credit 945 945 Dec-03 400 Repairs expense-Computer Cash Dec-04 4,550 Cash Accounts receivable 4,550 660 Dec-10 Wages expense Cash 660 (110*6) Dec-14 2,500 Cash Uneamed computer services revenue 2,500 Dec-15 1,700 Computer supplies Accounts payable 1,700 Dec-16 |No journal entry required Dec-20 6,525 Cash Computer services revenue 6,525 Dec-28 3,500 Cash Accounts receivable 3,500 135 Dec-29 Mileage expense Cash 135 1 (500*0.27) Dec-31 1,200 Dividends Cash 1,200

Part 2a: Transaction General Journal Debit Credit a. Computer supplies expense 3,735 Computer supplies 3,735 2645+1700-610 Insurance expense 495 Pre paid insurance T 495 (1980*3/12) Wages expense 440 Wages payable 440 (110*4) d. Depreciation expense-Computer equipment 1,450 Accumulated depreciation-Computer equipment | 1,450 (23200*3/48) Depreciation expense-Office equipment 430 Accumulated depreciation Office equipment 430 (8600*3/60) Rent expense 2,340 Prepaid rent 2,340 (3120*3/4)

Part 2b: Cash Debit Credit Date Dec. 01 Dec. 04 Dec. 28 Accounts Receivable Debit Credit Balance 12,718 4,550 8168 3,500 4668 945 400 4,550 Date Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 10 Dec. 14 Dec. 20 Dec. 28 Dec. 29 Dec. 31 660 Balance 38,264 37319 36919 41469 40809 43309 49834 53334 53199 51999 2,500 6,525 3,500 135 1,200 Computer Supplies Debit Credit Prepaid Insurance Debit Credit Date Dec. 01 Dec. 15 Dec. 31 Balance 2,645 4345 610 Date Dec. 01 Dec. 31 Balance 1,980 1485 1,700 495 3,735 Prepaid Rent Debit Credit Balance Date Dec. 01 Dec. 31 Date Dec. 01 Office Equipment Debit Credit Balance 8,600 3,120 2,340 780 Accumulated Depreciation Office Equipment Date Debit Credit Balance Dec. 01 Dec. 31 430 Date Dec. 01 Computer Equipment Debit Credit Balance 23,200 430 Accounts Payable Debit Credit Balance Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 1,450 1450 Date Dec. 01 Dec. 15 1 ,700 1700 Wages Payable Debit Credit Balance Date Dec. 01 Dec. 31 Uneamed Computer Services Revenue Date Debit Credit Balance Dec. 01 Dec. 14 2,500 2500 4401 440 Common Stock Debit Credit Retained Earnings Debit Credit Balance Date Dec. 01 Balance 66,000 Date Dec. 01 Dec. 31 Dec. 31 25,9221 25922 18822 7,100

Comita Dividends Debit Credit Balance 5,900 Date Dec. 01 Dec. 20 Dec. 31 Computer Services Revenue Date Debit Credit Balance Dec. 01 36,174 Dec. 31 6,525 42699 Dec. 31 42,699 1,200 7100 7,100 Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 1,450 1450 Dec. 31 1,450 Depreciation Expense-Office Equipment Date Debit Credit Balance Dec. 01 Dec. 10 430 Dec. 31 T 430 0 430 Insurance Expense Debit Credit Rent Expense Debit Credit Balance Balance Date Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Dec. 31 Dec. 31 495 2,340 2340 495 | 495 2,340 Computer Supplies Expense Debit Credit Balance Date Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Dec. 02 Dec. 31 Advertising Expense Debit Credit Balance 1,648 945 2593 2,593 3,735 3,735 Mileage Expense Debit Credit Balance Date Dec. 01 Dec. 29 Dec. 31 Miscellaneous Expenses Date Debit Credit Balance Dec. 01 240 Dec. 31 2400 135 809 809 Repairs Expense – Computer Date Debit Credit Balance Dec. 01 735 Dec. 03 400 1135 Dec. 31 1,135 Wages Expense Date Debit Credit Balance Dec. 01 2,450 Dec. 31 660 Dec. 31 440 3550 Dec. 313,5500 3110 Income Summary Debit Credit Balance Date Dec. 01 Dec. 31 Dec. 31 Dec. 31 42,6991 25,922 16,777 42,699 16,777

Cr 780 Part 3: BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2019 Account Title | Debit Cash 51,999 Accounts receivable 4,668 Computer supplies 610 Prepaid insurance 1,485 Prepaid rent Office equipment 8,600 Accumulated depreciation Office equipment Computer equipment 23,200 Accumulated depreciation-Computer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends 7,100 Computer services revenue Depreciation expense-Office equipment 430 Depreciation expense-Computer equipment 1,450 Wages expense 3,550 Insurance expense 495 Rent expense 2,340 Computer supplies expense 3,735 Advertising expense 2,593) Mileage expense 809) Miscellaneous expenses 2401 Repairs expense - Computer 1,135 Totals 1152191 1,450 1,700 440 2,500 66,000 42,699 115219

Debit Credit 42,699 42,699 16,777 430 1450 3550 495 Part 6: BUSINESS SOLUTIONS Balance Sheet December 31, 2019 Assets Cash 51,999 Accounts receivable 4,668 Computer supplies 610 Prepaid insurance 1,485 Prepaid rent 780 Office equipment 8,600 Accumulated depreciation Office equipment -430 8170 Computer equipment 23,200 Accumulated depreciation - Computer equipment | -1,450 21750 Total Assets 89462 Liabilities Accounts payable 1,700 Wages payable 440 Unearned computer services revenue 2,500 Total Liabilities 4640 Equity Common stock 66,000 Retained earnings 18,822 Total equity 84822 Total Liabilities and Equity 894621 Part 7: Date General Journal Dec-31 Computer services revenue Income summary (To close revenue account) Dec-31 Income summary 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 (to close expense account) Dec-31 Income summary Retained earnings (to close income summary account) Dec-31 Retained earnings Dividends (To close dividend account) 2340 3735 2593 809 240 1135 25.922 25,922 7.100 7,100

Part 8:. BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2019 Account Title 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 Debit Credit 51,999 4,668 610 1,485 780 8,600 430 23,200 1,450 1,700 440 2,500 66,000 18,822 91342 91342