Question

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. Credit Debit $ 38,664 13,418 2,645 2,160 3,160 8,300 $ 22,800 0 0 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 612 613 623 637 640 652 655 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 70,000 5,900 32,779 2,425 0 1,638

Answer 1

Business Solutions Journal Enteries Date Particulars 2.12.2020 Advertising expense a/c To Cash (Being Advertising expense paid in Cash) Debit in $ Credit in $ 980 Dr. 980 470 3.12.2020 Repairs expense - computer a/c Dr. To Cash (Being Computer repairs incurred in cash) 470 4650 4.12.2020 Cash a/c Dr. To Accounts Receivable (Being Cash received in Debtors) 4650 720 10.12.2020 Wage expense a/c Dr. To Cash (Being Wages paid in Lyn Addie) 720 1800 14.12.2020 Cash a/c Dr. To Unearned Computer service revenue (Being Cash received in advance from clients) 1800 Dr. 1700 15.12.2020 Computer Supplies a/c To Accounts Payable (Being Computer Supplies purchased on account) 1700 16.12.2020 No Entry 5675 20.12.2020 Cash a/c Dr. To Computer Services Revenue (Being Cash received for project completed) 5675 3800 28.12.2020 Cash a/c Dr. To Accounts Receivable (Being Cash received from Debtors) 3800 155 155 29.12.2020 Mileage expense a/c Dr. To Cash (Being Mileage expense paid in cash) 500 x 0.31 31.12.2020 Dividends a/c Dr. To Cash (Being Dividends paid in cash) 1300 1300

Adjustment enteries Date Particulars Debit in $Credit in $ 31.12.2020 Computer supplies expense a/c Dr. 3735 To Computer Supplies 3735 2645 + 1700-610 (Being Computer Supplies Expense charged to Computer Supplies) 540 540 31.12.2020 Insurance expense a/c Dr. To Prepaid Insurance 2160 * 3/12 (Being Insurance expense charged to Prepaid Insurance) 480 480 31.12.2020 Wage expense a/c Dr. To Wages Payable (Being Wages accrued) 120 x4 31.12.2020 Depreciation - Computer a/c Dr. To Accumulated Depreciation - Computer 22800 * 3/(4*12) (Being Depreciation charged to Computer Equip.) 1425 1425 415 415 31.12.2020 Depreciation - office equip a/c Dr. To Accumulated Depreciation - Office Equip 8300 * 3/5*12) (Being Depreciation charged to Office Equip.) 2370 2370 31.12.2020 Rent expense a/c Dr. To Prepaid Rent 3160 x 3/4 (Being Rent expense charged to Prepaid Rent) Closing Enteries Date Particulars 31.12.2020 Income Summary a/c Dr. To Depreciation - office equip To Depreciation - Computer To Wage expense To Insurance expense To Rent expense To Computer supplies expense To Advertising expense To Mileage expense To Miscellaneous expense To Repairs expense - computer Debit in $Credit in $ 17022 415 1425 3625 540 2370 3735 2618 799 250 1245 Dr. 38454 31.12.2020 Computer Service Revenue a/c To Income Summary 38454 Dr. 21432 31.12.2020 Income Summary a/c To Retained earnings 21432 Dr. 7200 31.12.2020 Retained Earnings a/c To Divdends 7200

Unadjusted Trial Balance As at 31.12.2020 4968 No. Particulars 101 Cash 106 Accounts Receivable 126 Computer Supplies 128 Prepaid Insurance 131 Prepaid Rent 163 Office Equipment 164 Accumulated Depreciation - Off. Equip 167 Computer Equipment 168 Accumulated Depreciation - Computer 201 Accounts Payable 210 Wages Payable 236 Unearned Computer service Revenue 307 Common Stock 318 Retained Earnings 319 Dividends 403 Computer Service Revenue 612 Depreciation - office equip 613 Depreciation - Computer 623 Wage expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expense 684 Repairs expense - computer Totals Unadjusted Adjustment Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 50964 50964 50964 4968 4968 4345 3735 610 610 2160 540 1620 1620 3160 2370 790 790 8300 8300 8300 0 415 415 415 22800 22800 22800 0 1425 1425 1425 1700 1700 1700 0 480 480 480 1800 1800 1800 70000 70000 70000 0 14232 7200 7200 38454 38454 0 415 415 1425 0 1425 3145 480 0 540 0 2370 3625 540 2370 3735 2618 799 0 3735 2618 799 250 250 1245 1245 111954 111954 8965 8965 114274 114274 90052 90052

38454 Amounts in $ Amounts in $ 415 Balance sheet As at 31.12.2020 Assets Current Assets Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Amounts in $ Amounts in $ Liabilities Current Liabilities 50964 Accounts Payable Wages Payable 610 Unearned Computer service Revenue 1700 4968 480 1800 Statement of Income For the period ending 31.12.2020 Computer Service Revenue Less: Depreciation - office equip Depreciation - Computer Wage expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expense Repairs expense - computer Net Income 3980 1425 3625 540 2370 1620 790 58952 3735 2618 799 8300 250 1245 Non Current Assets Office Equipment Accumulated Depreciatior Computer Equipment Accumulated Depreciation Total Assets 17022 21432 -415 22800 -1425 7885 Shareholders Equity Common Stock 21375 Retained Earnings 88212 Total Liabilities & Shareholders Equity 70000 14232 84232 88212 0 Statement of Retained Earnings For the period ending 31.12.2020 Beginning Balance Net Income Dividends 31.12.2020 21432 -7200 14232