Question

Serial Problem Business Solutions LO P1, P2, P3, P4, P5, P6 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 $ 38,964 13,618 2,645 2,220 3,060 8,200 23,600 63,000 No. Account Title 101 Cash Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation office equipment 167 Computer equipment 168 Accumulated depreciation-Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-Office equipment 613 Depreciation expense-Computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals 6,200 41,244 2,550 1,628 664 170 725 $104,244 $104,244

Answer 1

Business Solutions Journal Enteries Particulars 2.12.2019 Advertising expense a/c Debit in $Credit in $ Date 940 Dr. To Cash 940 (Being Advertising expense paid in Cash) 3.12.2019 Repairs expense computer a/c 410 Dr. To Cash 410 (Being Computer repairs incurred in cash) 4.12.2019 Cash a/c 3950 Dr. To Accounts Receivable 3950 (Being Cash received in Debtors) 10.12.2019 Wage expense a/c Dr. 660 To Cash 660 (Being Wages paid in Lyn Addie) 14.12.2019 Cash a/c 2400 Dr. To Unearned Computer service revenue 2400 (Being Cash received in advance from clients) 15.12.2019 Computer Supplies a/c 1200 Dr. To Accounts Payable 1200 (Being Computer Supplies purchased on account) 16.12.2019 No Entry 20.12.2019 Cash a/c Dr. 6225 To Computer Services Revenue 6225 (Being Cash received for project completed) 28.12.2019 Cash a/c Dr. 3200 To Accounts Receivable 3200 (Being Cash received from Debtors) 29.12.2019 Mileage expense a/c Dr. 108 To Cash 108 (Being Mileage expense paid in cash) х 31.12.2019 Dividends a/c Dr. 1500 To Cash 1500 (Being Dividends paid in cash)

Adjustment enteries Particulars Debit in $ Credit in $ Date 31.12.2019 Computer supplies expense a/c Dr. 3175 To Computer Supplies 26451200-670 3175 (Being Computer Supplies Expense charged to Computer Supplies) 31.12.2019 Insurance expense a/c Dr. 555 To Prepaid Insurance 555 2220 3/12 (Being Insurance expense charged to Prepaid Insurance) 31.12.2019 Wage expense a/c Dr. 440 To Wages Payable (Being Wages accrued) 110 x 4 440 31.12.2019 Depreciation -Computer a/c Dr. 1475 To Accumulated Depreciation Computer |23600* 3/(4 12) (Being Depreciation charged to Computer Equip.) 1475 31.12.2019 Depreciation - office equip a/c Dr. 410 To Accumulated Depreciation Office Equip 8200 3/(5*12) (Being Depreciation charged to Office Equip.) 410 31.12.2019 Rent expense a/c 2295 Dr. To Prepaid Rent 3060 x 3/4 (Being Rent expense charged to Prepaid Rent) 2295 Closing Enteries Particulars Debit in $Credit in $ Date 31.12.2019 Income Summary a/c Dr. 16205 To Depreciation - office equip 410 To Depreciation-Computer 1475 To Wage expense 3650 To Insurance expense 555 To Rent expense 2295 To Computer supplies expense 3175 To Advertising expense 2568 To Mileage expense 772 To Miscellaneous expense 170 To Repairs expense computer 1135 47469 31.12.2019 Computer Service Revenue a/c Dr. To Income Summary 47469 31.12.2019 Income Summary a/c 31264 Dr. To Retained earnings 31264 31.12.2019 Retained Earnings a/c 7700 Dr. To Divdends 7700

Unadjusted Trial Balance As at 31.12.2019 Post Closing Unadjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Adjustment Adjusted No. Particulars 101 Cash 51121 51121 51121 Accounts Receivable 106 6468 6468 6468 126 Computer Supplies 3845 3175 670 670 128 Prepaid Insurance 2220 555 1665 1665 131 Prepaid Rent 3060 2295 765 765 Office Equipment 163 8200 8200 8200 Accumulated Depreciation - Off. Equip 164 0 410 410 410 167 Computer Equipment 23600 23600 23600 Accumulated Depreciaion - Computer 168 0 1475 1475 1475 Accounts Payable 201 1200 1200 1200 210 Wages Payable 0 440 440 440 Unearned Computer service Revenue 2400 2400 2400 236 Common Stock 63000 63000 307 63000 318 Retained Earnings 0 23564 319 Dividends 7700 7700 47469 403 Computer Service Revenue 47469 Depreciation - office equip 612 410 410 613 Depreciation -Computer 0 1475 1475 Wage expense 3650 623 3210 440 Insurance expense 637 555 555 Rent expense 2295 640 0 2295 Computer supplies expense 652 0 3175 3175 655 Advertising expense 2568 2568 676 Mileage expense 772 772 677 Miscellaneous expense 170 170 Repairs expense computer 1135 684 1135 Totals 116394 116394 114069 114069 8350 8350 92489 92489 O

Statement of Income For the period ending 31.12.2019 Computer Service Revenue 47469 Less: Depreciation - office equip 410 Depreciation -Computer 1475 Wage expense 3650 Insurance expense 555 Rent expense 2295 Computer supplies expense 3175 Advertising expense 2568 Mileage expense 772 Miscellaneous expense 170 Repairs expense- computer 1135 16205 Net Income 31264 Statement of Retained Earnings For the period ending 31.12.2019 Beginning Balance 0 Net Income 31264 Dividends -7700 Ending Balance 23564

Balance sheet As at 31.12.2019 Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Assets Current Liabilities Current Assets Accounts Payable Cash 51121 1200 Wages Payable 440 Accounts Receivable 6468 Computer Supplies Unearned Computer service Revenue 4040 670 2400 Prepaid Insurance 1665 Prepaid Rent 765 60689 Shareholders Equity Non Current Assets Office Equipment 8200 Common Stock 63000 Accumulated Depreciation 7790 Retained Earnings 23564 -410 86564 Computer Equipment 23600 Accumulated Depreciation -1475 22125 90604 Total Liabilities & Shareholders Equity Total Assets 90604