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. Credit No. 101 106 126 128 131 163 164 167 168 201 Debit $ 38,664 13,018 2.545 1,920 3,140 8,100 21.600 210 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 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 68,000 6,100 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 32,779 1.708 704 725 $100.779 $100,779 Business Solutions had the following transactions and events in December 2019 Dec. 2 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 Addie 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 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. 16 22-26 31

I'm having trouble with this problem. My numbers don't add up when I'm doing the balance sheet. I'm not sure what I'm doing wrong.

Answer 1

Debit Credit Credit Accounts Receivable Date Debit 1-Dec 4-Dec 28-Dec Balance 13018 8068 4468 1010 500 4950 3600 4950 Cash | Date 1-Dec 2-Dec 3-Dec 4-Dec 10-Dec 14-Dec 20-Dec 28-Dec 29-Dec 31-Dec 660 Balance 38,664 37,654 37,154 42,104 41,444 43,544 50,119 53,719 53,527 52,327 2100 6575 3600 192 1200 68 69 70

Debit Credit Prepaid Rent | Date 1-Dec 31-Dec Credit Office equipment Date Debit 1-Dec Balance 3140 785 Balance 8,100 2355 Credit Balance Accumulated Depreciation - Office Equipment | Date Debit 1-Dec 31-Dec Computer equipment | Date Debit 1-Dec Credit Balance 21,600 405 405 Accumulated Depreciation - ComputerEquipment | Date Debit 1-Dec 31-Dec Credit Balance Credit Accounts Payable Date Debit 1-Dec 15-Dec Balance 1350 1350 2000 2000 Debit Credit Balance Balance Wages Payable Date 1-Dec 31-Dec Unearned Computer Service revenue | Date Debit Credit 1-Dec 14-Dec 2100 440 440 2100 100

104 Common Stock Date 1-Dec Debit Credit Retained Earnings Date Debit 1-Dec Credit Balance 68000 Balance 106 107 108 109 Debit Credit Credit Dividends Date 1-Dec 31-Dec Computer Service Revenue Date Debit 1-Dec 20-Dec Balance 6100 7300 111 112 113 Balance 32779 39354 1200 6575 115 117 Credit Balance Balance Depreciation expense-Office Equipment Date Debit 1-Dec 31-Dec Depreciation expense -Computer Equipment Date Debit Credit 1-Dec Dec-19 1350 118 119 405 1350 120 121 122 Debit Credit Credit Balance Wages expense Date 1-Dec 10-Dec 31-Dec 124 125 Insurance expense Date Debit 1-Dec 31-Dec Balance 2325 2985 3425 480 480 660 440 126 127

Debit Credit Balance Credit Balance 132 133 Rent expense Date 1-Dec 31-Dec Computer Supplies expense Date Debit 1-Dec 31-Dec 3885 2355 2355 3885 134 135 136 Debit Credit Credit Advertising expense Date 1-Dec 2-Dec Mileage expense Date Debit 1-Dec 29-Dec Balance 1708 2718 137 Balance 704 896 138 1010 192 139 140 Miscellaneous expense Date 1-Dec Debit Credit Credit Balance 230 Repairs expense - Computer Date Debit 1-Dec 3-Dec 500 142 Balance 725 1225 144 Debit 145 146 147 148 149 150 Income Summary Date 31-Dec 31-Dec Credit 39354 Balance 39354 16969

152 153 154 155 Credit 156 Business Solutions Adjusted Trial Balance December 31, 2019 Debit 52,327 4468 660 1,440 785 8,100 158 159 160 162 405 21,600 163 164 165 166 167 Account Title Cash Accounts Receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equip. 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 1350 2000 440 2100 68000 169 7300 171 39354 174 405 1350 3425 480 2355 175 176

177 178 179 Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals 3885 2718 896 230 1225 113649 180 181 182 113649 183 184 Business Solutions Income Statement December 31, 2019 39354 188 189 192 Computer services revenue Less Expenses 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 Total Expenses Net Income 405 1350 3425 480 2355 3885 2718 896 230 1225 194 197 198 199 200 16969 22385

202 204 205 Business Solutions Retained Earnings Statement December 31, 2019 Beginning Balance of Retained Earnings Add Net Income 22385 Less Dividend -7300 Ending Balance of Retained Earnings 206 207 15085 15085 208 209 Business Solutions Balance Sheet December 31, 2019 214 215 217 Assets Cash Accounts Receivable Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation Office equipment Computer equipment Accumulated depreciation-Computer equip. Total Assets 52,327 4468 660 1,440 785 219 7,695 8,100 -405 21,600 -1350 223 224 20,250 87,625 225

226 229 Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity Common Stock Retained Earnings Total Liabilities and Equity 2000 440 2100 4540 68000 15085 87625 234 235