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. No. Account Title Debit Credit 101 Cash $ 38,564 106 Accounts receivable 12,818 126 Computer supplies 2,645 128 Prepaid insurance 2,040 131 Prepaid rent 3,140 163 Office equipment 8,800 164 Accumulated depreciation—Office equipment $ 0 167 Computer equipment 22,000 168 Accumulated depreciation—Computer equipment 0 201 Accounts payable 0 210 Wages payable 0 236 Unearned computer services revenue 0 307 Common stock 71,000 318 Retained earnings 0 319 Dividends 5,800 403 Computer services revenue 30,559 612 Depreciation expense—Office equipment 0 613 Depreciation expense—Computer equipment 0 623 Wages expense 2,425 637 Insurance expense 0 640 Rent expense 0 652 Computer supplies expense 0 655 Advertising expense 1,678 676 Mileage expense 654 677 Miscellaneous expenses 200 684 Repairs expense—Computer 795 Totals $ 101,559 $ 101,559 Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid $945 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 $4,050 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 $105 per day. 14 Notified by Alex’s Engineering Co. that Business Solutions's bid of $7,100 on a proposed project has been accepted. Alex’s paid a $1,800 cash advance to Business Solutions. 15 Purchased $1,700 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 $5,875 cash. 22–26 Took the week off for the holidays. 28 Received $3,300 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.26 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 $630 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 $105 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.

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 $ 38,564 12,818 2,645 2,040 3, 140 8,800 $ 0 22,000 No. 101 106 126 128 131 163 164 167 168 201 210 236 307 318 319 403 612 613 623 637 640 652 655 676 677 684 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 Mileage expense Miscellaneous expenses Repairs expense-Computer Totals 0 0 0 0 71,000 0 5,800 30,559 @ 0 2,425 0 @ 0 1,678 654 200 795 $101,559 $101,559 Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid $945 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 $4,050 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 $105 per day. 14 Notified by Alex's Engineering Co. that Business Solutions's bid of $7,100 on a proposed project has been accepted. Alex's paid a $1,800 cash advance to Business Solutions. 15 Purchased $1,700 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 $5,875 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 (500 miles at $0.26 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. a. The December 31 inventory count of computer supplies shows $630 still available b. Three months have expired since the 12-month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $105 per day. d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months' prepaid rent have expired.

Answer 1

As per Chegg Guidlines we are allowed to post 4 solutions for a single question -

In the last submission I have already submitted 1-4 part of the question now I am submitting remaining solutions of this question.

1. Ledgers -

Dec. 1 Dividends $ 5,800 $ 1,500 Dec 31 Dec. 1 Dec 4 Dec 14 Dec 20 Dec 28 Cash $ 38,564 Dec 2 $ 4,050 Dec 3 $ 1,900 Dec 10 $ 5,975 Dec 29 $ 3,600 Dec 31 $ 1,015 $ 430 $ 690 $ 168 $ 1,500 Dec 31 $ 7,300 Dec 31 $ 50,286 $ 54,089 $ 54,089 Computer Service Revenue Dec. 1 $ 30,559 Dec 20 $ 5,975 Dec. 1 Accounts Receivable $ 12,818 Dec 4 Dec 28 Dec 31 $ 36,534 $ 4,050 $ 3,600 Dec 31 $ 5,168 Depreciation Expenses - Office Equipment $ 435 e Dec 31 $ 435 Dec. 1 Dec 15 Computer Supplies $ 2,645 a $ 2,000 $ 3,985 Dec 31 $ 660 preciation Expenses - Computer Equipme d $ 1,250 Dec 31 $ 1,250 Prepaid Insurance $ 2,040 b Dec. 1 $ 525 Dec 31 $ 1,515 Dec. 1 Dec 10 Wages Expense $ 2,425 $ 690 $ 460 Dec 31 с $ 3,575 Prepaid Rent $ 3,140 f Dec. 1 $ 2,190 Dec 31 $ 950 Insurance Expense $ 525 b Office Equipment $ 8,800 Dec. 1 Dec 31 $ 525 Dec 31 $ 8,800 Rent Expense $ 2,190 f ccumulated Depreciation - Office Equipmer $ 435 e Dec 31 $ 2,190 Dec 31 $ 435 Computer Supplies Expense $ 3,985 a Computer Equipment $ 22,000 Dec. 1 Dec 31 $ 3,985 Dec 31 $ 22,000 Dec. 1 Dec 2 Advertising Expense $ 1,678 $ 1,015 umulated Depreciation - Computer Equipm d $ 1,250 Dec 31 $ 2,693 Dec 31 $ 1,250 Dec. 1 Dec 29 Mileage Expense $ 654 $ 168 Accounts Payable Dec 15 $ 2,000 Dec 31 $ 822 Dec 31 $ 2,000 Miscellaneous Expense $ 200 Dec. 1 Wages Payable с $ 460 Dec 31 $ 200 Dec 31 $ 460 Repair Expense - Computer Dec. 1 $ 795 Dec 3 $ 430 Unearned Computer Service Revenue Dec 14 $ 1,900 Dec 31 $ 1,225 Dec 31 $ 1,900 Common Stock Dec. 1 $ 71,000 Dec 31 $ 71,000

2. Balance Sheet -

Business Solutions Balance Sheet As on December 31, 2018 Asset Current Assets: Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Total Current Assets $ 50,286 $ 5,268 $ 660 $ 1,575 $ 730 $58,519 Office Equipment $ 8,700 Accumulated Depreciation - Office Equipment $ (435) $ 8,265 Computer Equipment $ 20,000 Accumulated Depreciation - Computer Equipment $ (1,250) $18,750 Total Assets $ 85,534 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable Wages Payable Unearned Computer Service Revenue Total Current Liabilites $ 2,000 $ 460 $ 1,900 $ 4,360 Stockholder's Equity: Common Stock Retained Earnings Total Stockholder's Equity $ 65,000 $ 16,174 $ 81,174 Total Liabilities and Stockholder's Equity $ 85,534

3. Closing Entries -

Date Credit Business Solutions Closing Entries Accounts Title Computer Service Revenue Income Summary (Being Revenue Account Closed) Debit $ 40,389 1 $ 40,389 2 $ 16,715 Income Summary Depreciation Expenses - Office Equipment Depreciation Expenses - Computer Equipment Wages Expense Insurance Expense Rent Expense Computer Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expense Repair Expense - Computer (Being Expense Account Closed) $ 435 $ 1,250 $ 3,400 $ 525 $ 2,190 $ 3,985 $ 2,713 $ 832 $ 180 $ 1,205 3 Income Summary $ 23,674 Retained Earnings (Being Balance transferred to retained earnings) $ 23,674 4 $ 7,500 Retained Earnings Dividends (Being dividend account closed) $ 7,500

4. Post Closing Trial Balance -

Credit Business Solutions Post Closing Trial Balance As on December 31, 2018 Accounts 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 Service Revenue Common Stock Retained Earnings Debit $ 50,286 $ 5,268 $ 660 $ 1,575 $ 730 $ 8,700 $ 435 $ 20,000 $ 1,250 $ 2,000 $ 460 $ 1,900 $ 65,000 $ 16,174 Total $ 87,219 $ 87,219