Question

Serial Problem Business Solutions LO P1, P2, P3 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2017, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2017) follows. Credit Debit $ 38,264 12,618 2,545 2,220 3,300 8,000 20,000 No. Account Title 101 Cash 106 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 301 S. Rey, Capital 302 S. Rey, Withdrawals 403 Computer services revenue 612 Depreciation expense-Office equipment 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 73,000 5,600 25,659 OOOOO 1,728 704 250 805 $ 98,659 $98,659

Answer 1

Part 1: Date Dec-02 General Journal Advertising expense Cash Debit Credit 1,025 1,025 Dec-03 500 Repairs expense-Computer Cash 500 Dec-04 3,950 Cash Accounts receivable 3,950 750 Dec-10 Wages expense Cash 750 (125*6) Dec-14 1,500 Cash Uneamed computer services revenue 1,500 Dec-15 1.100 Computer supplies Accounts payable 1,100 Dec-16 |No journal entry required Dec-20 5,625 Cash Computer services revenue 5,625 Dec-28 3,000 Cash Accounts receivable 3,000 192 Dec-29 Mileage expense Cash 192 (600*0.32) Dec-31 1,500 S. Rey, withdrawals Cash 1,500

b. Part 2a: Transaction General Journal Debit Credit a. Computer supplies expense 3,065 Computer supplies 3,065 2545+1100-5801 Insurance expense 555 Pre paid insurance T 555 (2220*3/12) Wages expense 500 Wages payable 500 (125*4) d. Depreciation expense-Computer equipment 1,250 Accumulated depreciation-Computer equipment 1,250 (20000*3/48) Depreciation expense-Office equipment 1400 Accumulated depreciation-Office equipment 400 (8000*3/60) Rent expense 2,475 Prepaid rent 2,475 (3300*3/4)

Part 2b: Cash Debit Credit Date Dec. 01 Dec. 04 Dec. 28 Accounts Receivable Debit Credit Balance 12,618 3,950 8668 3 ,000 5668 1,025 5001 | 3,950 Date Dec. 01 Dec. 02 Dec. 03 Dec. 04 Dec. 10 Dec. 14 Dec. 20 Dec. 28 Dec. 29 Dec. 31 750 Balance 38,264 37239 36739) 40689 39939 41439 47064 50064 49872 48372 1,500 5,625 3,000 192 1,500 Computer Supplies Debit Credit Date Dec. 01 Dec. 15 Dec. 31 Balance 2,545 3645 580 Date Dec. 01 Dec. 31 Pre paid Insurance Debit Credit Balance 2,220 555 1665 1,100 3,065 Prepaid Rent Debit Credit Office Equipment Debit Credit Date Dec. 01 Dec. 31 Balance 3,300 825 Date Dec. 01 Balance 8,000 2,475 Accumulated Depreciation Office Equipment Date Debit Credit Balance Dec. 01 Dec. 31 400 Date Dec. 01 Computer Equipment Debit Credit Balance 20,000 Accounts Payable Debit Credit Balance Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 1,250 1250 Date Dec. 01 Dec. 15 1,100 1100 Wages Payable Debit Credit Balance Date Dec. 01 Dec. 31 Uneared Computer Services Revenue Date Debit Credit Balance Dec. 01 Dec. 14 1500 500 1,500 S. Rey, capital Debit Credit Date Dec. 01 Dec. 31 Dec. 31 Balance 73000 87460 80360 14,460 7,100

Comita S. Rey, withdrawals Debit Credit Balance 5,600 Date Dec. 01 Dec. 20 Dec. 31 Computer Services Revenue Date Debit Credit Balance Dec. 01 25,659 Dec. 31 5,625 31284 Dec. 31 31,284 1,500 71001 7,100 Depreciation Expense-Computer Equipment Date Debit Credit Balance Dec. 01 Dec. 31 1,250 Dec. 31 1, 2500 | Depreciation Expense-Office Equipment Date Debit Credit Balance Dec. 01 Dec. 10 4 00 Dec. 31 400 Insurance Expense Debit Credit Rent Expense Debit Credit Balance Balance Date Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Dec. 31 Dec. 31 555 2,475 2475 | 555 2,475 Computer Supplies Expense Debit Credit Balance Date Dec. 01 Dec. 31 Dec. 31 Date Dec. 01 Dec. 02 Dec. 31 Advertising Expense Debit Credit Balance 1,728 1,025 2753 2,753 3,065 3065 3,065 Mileage Expense Debit Credit Balance Miscellaneous Expenses Date Debit Credit Balance Dec. 01 250 Dec. 31 T 250 Date Dec. 01 Dec. 29 Dec. 31 704 192 896 896 Wages Expense Debit Credit Repairs Expense - Computer Date Debit Credit Balance Dec. 01 Dec. 03 500 Dec. 31 1,305 805 1305 Date Dec. 01 Dec. 31 Dec. 31 Dec. 31 750 500 Balance 2,625 3375 3875 0 | 3,875 Income Summary Debit Credit Balance Date Dec. 01 Dec. 31 Dec. 31 Dec. 31 31,284 L 31,284 16,824 14,460 16,824

Credit Debit 48,372 5,668 580 1,665 825 8,000 20,000 Part 3: BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2017 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 S. Rey, Capital S. Rey, withdrawals Computer services revenue Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Totals 1,250 1,100 500 1,500 73000 7,100 31,284 400 1,250 3,8751 5551 2,475 3,0651 2,753 896 250 1,305 109034 109034

Part 4: BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2017 Revenue Computer services revenue 31,284 Expenses Depreciation expense-Office equipment 400 Depreciation expense - Computer equipment 1250 Wages expense 3875 Insurance expense 555 Rent expense 2475 Computer supplies expense 3065 Advertising expense 2753 Mileage expense 896 Miscellaneous expenses 250 Repairs expense-Computer 1305 Total expenses Net income 16824 14,460 Part 5: BUSINESS SOLUTIONS Statement of Owners equity For Three Months Ended December 31, 2017 S. Rey, capital, December 1, 2017 2017 73000 Add: Net income 14,460 87460 Less: withdrawals 7,100 S. Rey, capital, December 31, 2017 80,360

825 Part 6: BUSINESS SOLUTIONS Balance Sheet December 31, 2017 Assets Cash 48,372 Accounts receivable 5,668 Computer supplies 580 Prepaid insurance 1,665 Prepaid rent Office equipment 8,000 Accumulated depreciation - Office equipment -400 7600 Computer equipment 20,000 Accumulated depreciation Computer equipment -1,250 18750 Total Assets 83460 Liabilities Accounts payable 1,100 Wages payable Unearned computer services revenue 1,500 Total Liabilities 3100 Equity S. Rey, capital 80,360 Total equity 80360 Total Liabilities and Equity 83460

Debit Credit 31,284 31,284 16,824 400 1250 Part 7: Date General Journal Dec-31 Computer services revenue Income summary (To close revenue account) Dec-31 Income summary Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer (to close expense account) Dec-31 Income summary S. Rey, capital (to close income summary account) Dec-31 S. Rey, capital S. Rey, withdrawals (To close dividend account) 3875 555 2475 3065 2753 896 250 1305 14,460 14,460 1.100 7,100

Part 8:. BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2017 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 S. Rey, capital Totals Debit Credit 48,372 5,668 580 1,665 825 8,000 400 20,000 1,250 1,100 500 1,500 80,360 85110 85110