Question

Suomitted ded After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2020) follows. No. Account Title 101 Debit Credit Cash $ 38,564 106 Accounts receivable 126 Computer supplies 13,618 2,545 128 Prepaid insurance 1,920 131 Prepaid rent 3,000 163 Office equipment 8,200 164 Accumulated depreciation-office equipment 8 167 Computer equipment 20,000 168 Accumulated depreciation-Computer equipment 201 Accounts payable 0 210 Wages payable 236 Unearned computer services revenue 307 Common stock 70,000 318 Retained earnings 319 Dividends 5,900 403 Computer services revenue 29,704 612 Depreciation expense-office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 2,600 637 Insurance expense @ 640 Rent expense @ 652 Computer supplies expense 655 Advertising expense 1,718 676 Mileage expense 704 677 Miscellaneous expenses 180 684 Repairs expense-Computer 755 Totals $ 99,704 $99, 784 es Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid $940 cash to Hillside Mall for Business Solutions's share of mall advertising costs. 3 Paid $420 cash for minor repairs to the company's computer. 4 Received $4,850 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 $115 per day. 14 Notified by Alex's Engineering Co. that Business Solutions's bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,700 cash advance to Business Solutions. 15 Purchased $1,800 of computer supplies on credit fron 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 $6,325 cash. 22- Took the week off for the holidays. 26 28 Received $3,300 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (680 miles at $0.25 per site). 31 The company paid $1,100 cash in dividends. Prev 1 of 1 !!! Next

Answer 1

Solution ;

                     Journal entries

Date	Particulars	Debit	Credit
2/12/2020	Advertising expense a/c	940
	To Cash		940
	(paid advertising expense)
3/12/2020	Repairs expense- computer	420
	To Cash		420
	(Paid computer repairs)
4/12/2020	Cash a/c	4850
	To Accounts receivable		4850
	(Cash received from debtors)
10/12/2020	Wages expense a/c	690
	To Cash (6*115)		690
	(Wages paid)
14/12/2020	Cash a/c	1700
	To Unearned computer service revenue		1700
	(Cash received advanced from clients)
15/12/2020	Computer supplies a/c	1800
	To Accounts payable		1800
	(Computer supplies purchased on credit)
16/12/2020	No entry
20/12/2020	Cash a/c	6325
	To Computer service revenue		6325
	(Cash received for project completed)
28/12/2020	Cash a/c	3300
	To Accounts receivable		3300
	(Cash received from debtors)
29/12/2020	Mileage expense a/c	150
	To Cash (600*.025)		150
	(Paid mileage expense)
31/12/2020	Divident a/c	1100
	To Cash		1100
	(Divident paid)

                      Adjusting journal entries

Date	Particulars	Debit	Credit
31/12/2020	Computer Supplies expense a/c	3695
	To Computer supplies(2545+1800-650)		3695
	(Computer supplies expense charged to computer supplies)
31/12/2020	Insurance expense a/c	480
	To Prepaid insurance(1920*3/12)		480
	(Insurance expense charged to prepaid insurance)
31/12/2020	Wages expense a/c	460
	To Wages payable(115*4)		460
	(Accrued wages)
31/12/2020	Depreciation- Computer a/c (20000*3 / (4*12)	1250
	To Accumulated depreciation - computer		1250
	(Depreciation charged to computer equipment)
31/12/2020	Depreciation office equipment (8200*3 / (5*12)	410
	To Accumulated depreciation-Office equipment		410
	(Depreciation charged to office equipment)

31/12/2020            Rent expense a/c                                                  2250

                                To Prepaid expense (3000*3/4)                                                      2250

                              (Rent expense charged to prepaid rent)

                                    Closing entries

Date	Particulars	Debit	Credit
31/12/2020	Income summary a/c	16702
	To Depreciation equipment		410
	To Depreciation computer		1250
	To Wages expense		3750
	To Insurance expense		480
	To Rent expense		2250
	To Computer supplies expense		3695
	To Advertising expense		2658
	To Mileage expense		854
	To Miscellaneous expense		180
	To Repairs expense - Computer		1175
31/12/2020	Computer service revenue a/c	36029
	To Income summary		36029
31/12/2020	Income summary a/c	19327
	To Retained earnings*		19327
31/12/2020	Income summary	7000
	To Divident		7000

               Statement of income

      For the year ending 31/12/2020

Computation of service revenue		36029
Less. Depreciation - Office equipment	410
Depreciation -Computer	1250
Wages expense	3750
Insurance expense	480
Rent expense	2250
Computer supplies expense	3695
Advertising expense	2658
Mileage expense	854
Miscellaneous expense	180
Repairs expense - computer	1175	16702
Net income		19327
Unadjusted Trial balance
As at 31/12/2020

No	Particulars	Debit	Credit
101	Cash	51439
106	Accounts receivable	5468
126	Computer supples	4345
128	Prepaid insurance	1920
131	Prepaid rent	3000
163	Office equipment	8200
164	Accumulated Depreciation- Office equipment		0
167	Computer equipment	20000
168	Accumulated depreciation - Computer		0
201	Accounts payable		1800
210	Wages payable		0
236	Unearned computer service revenue		1700
307	Common stock		70000
318	Retained earnings		0
319	Divident	7000
403	Computer service revenue		36029
612	Depreciation - Office equipment	0
613	Depreciation - Computer	0
623	Wage expense	3290
637	Insurance expense	0
640	Rent expense	0
652	Computer supplies expense	0
655	Advertising expense	2658
676	Mileage expense	854
677	Miscellaneous expense	180
684	Repairs expense - computer	1175
	Total	109529	109529