[Solved 100% Accurate]Acct 1311: Financial Accounting-1, 2 & 3 Comprehensive Problem
$10After 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 | Debit | Credit | |||
| 101 | Cash | $ | 38,264 | |||
| 106 | Accounts receivable | 12,618 | ||||
| 126 | Computer supplies | 2,545 | ||||
| 128 | Prepaid insurance | 2,220 | ||||
| 131 | Prepaid rent | 3,300 | ||||
| 163 | Office equipment | 8,000 | ||||
| 164 | Accumulated depreciation—Office equipment | $ | 0 | |||
| 167 | Computer equipment | 20,000 | ||||
| 168 | Accumulated depreciation—Computer equipment | 0 | ||||
| 201 | Accounts payable | 0 | ||||
| 210 | Wages payable | 0 | ||||
| 236 | Unearned computer services revenue | 0 | ||||
| 307 | Common stock | 73,000 | ||||
| 318 | Retained earnings | 0 | ||||
| 319 | Dividends | 5,600 | ||||
| 403 | Computer services revenue | 25,659 | ||||
| 612 | Depreciation expense—Office equipment | 0 | ||||
| 613 | Depreciation expense—Computer equipment | 0 | ||||
| 623 | Wages expense | 2,625 | ||||
| 637 | Insurance expense | 0 | ||||
| 640 | Rent expense | 0 | ||||
| 652 | Computer supplies expense | 0 | ||||
| 655 | Advertising expense | 1,728 | ||||
| 676 | Mileage expense | 704 | ||||
| 677 | Miscellaneous expenses | 250 | ||||
| 684 | Repairs expense—Computer | 805 | ||||
| Totals | $ | 98,659 | $ | 98,659 | ||
Business Solutions had the following transactions and events in December 2020.
| Dec. | 2 | Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. | |
| 3 | Paid $500 cash for minor repairs to the company’s computer. | ||
| 4 | Received $3,950 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's 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. | ||
| 29 | Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). | ||
| 31 | The company paid $1,500 cash in dividends. | ||
The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company’s first three months.
- The December 31 inventory count of computer supplies shows $580 still available.
- Three months have expired since the 12-month insurance premium was paid in advance.
- As of December 31, Lyn Addie has not been paid for four days of work at $125 per day.
- The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
- The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
- Three of the four months' prepaid rent have expired.
Required:
1. Prepare journal entries to record each of the December transactions and events for Business Solutions.
2-a. Prepare adjusting entries to reflect a through f.
2-b. Post the journal entries to record each of the December transactions from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7, post the closing entries to the general ledger accounts.
3. Prepare an adjusted trial balance as of December 31, 2020.
4. Prepare an income statement for the three months ended December 31, 2020.
5. Prepare a statement of retained earnings for the three months ended December 31, 2020.
6. Prepare a balance sheet as of December 31, 2020.
7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B.
8. Prepare a post-closing trial balance as of December 31, 2020.
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