Question

No. 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. Account Title Credit 101 Cash $ 38,254 106 Accounts receivable 12,618 126 Computer supplies 2,545 128 Prepaid insurance 2,220 131 Prepaid rent 3,300 163 office equipment 164 Accumulated depreciation office equipment 167 Computer equipment 20.000 168 Accumulated depreciation Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 73,000 318 Retained earnings e 319 Dividends 5,600 Computer services revenue 25,659 612 Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense 2,625 637 Insurance expense 640 Rent expense 652 Computer supplies expense e 655 Advertising expense 1,728 676 Mileage expense 784 672 Miscellaneous expenses 250 684 Repairs expense-Computer Totals $ 98,659 $98,659 e Business Solutions had the following transactions and events in December 2019. Dec. 2 Paid $1,025 cash to Hillside Mall for Business Solutions' share of all advertising costs. 3 Paid $500 cash for minor repairs to the company's computer. 4 Received $3,95e 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 $125 per day. 14 Notified by Alex's Engineering Co. that Business Solutions bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Business Solutions. 15 Purchased $1,100 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 $5,625 cash. 22-26 Took the week off for the holidays. 28 Received $3,000 cash from Gomez Co. on its receivable. 31 The company paid $1,500 cash in dividends. 29 Reimbursed S. Rey for business automobile -ileage (60 miles at $2.32 per aile). The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months. a. The December 31 inventory count of computer supplies shows $580 still available. b. Three months have expired since the 12-month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five year life with no salvage value.

Answer 1

Solution ;

                             Journal entries

Date	Particulars	Debit	Credit
2/12/2017	Advertising expense a/c	1025
	To Cash		1025
	(Advertising expense paid)
3/12/2017	Repairs expense- computer a/c	500
	To Cash		500
	(Computer repairs paid)
4/12/2017	Cash a/c	3950
	To Accounts receivable		3950
	(Cash received from debtors)
10/12/2017	Wages expense a/c	750
	To Cash (125 * 6)		750
	(Wages paid)
14/12/2017	Cash a/c	1500
	To Unearned computer service revenue		1500
	(Cash received advance from clint)
15/12/2017	Computer supplies a/c	1100
	To Accounts payable		1100
	(Purchased computer supplies on credit)
16/12/2017	No entry
20/12/2017	Cash a/c	5625
	To Computer service revenue		5625
	(Cash received from project completed)
28/12/2017	Cash a/c	3000
	To Accounts receivable		3000
	(Cash received from debtors)
29/12/2017	Mileage expense a/c	192
	To Cash (600 * 0.32)		192
	(Paid mileage expense)
31/12/2017	Dividends a/c	1500
	To Cash		1500
	(Dividends paid)

                            Adjusting journal entries

Date	Particulars	Debit	Credit
31/12/2017	Computer supplies expense a/c	3065
	To Computer suppliers		3065
	(Computer supplies expense charged to computer supplies)2545+1100-580
31/12/2017	Insurance expense a/c	555
	To Prepaid insurance(2220*3/12)		555
	(Insurance expense charged to prepaid insurance)
31/12/2017	Wages expense a/c	500
	To Wages payable (125*4)		500
	(Accrued wages)
31/12/2017	Depreciation - computer	1000
	To Accumulated depreciation- computer    (20000*3 / (5*12)		1000
	(Depreciation charged to computer equipment)
31/12/2017	Depreciation- Office equipments	400
	To Accumulated depreciation-office equip.         (8000*3 / (5*12)		400
	(Depreciation charged to office equipment)