After the success of the company's first two months, Santana Rey continues to operate Business Solutions

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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.

No.Account TitleDebitCredit101Cash$38,364   106Accounts receivable 12,818   126Computer supplies 2,645   128Prepaid insurance 2,040   131Prepaid rent 2,960   163Office equipment 8,700   164Accumulated depreciation—Office equipment   $0167Computer equipment 21,600   168Accumulated depreciation—Computer equipment    0201Accounts payable    0210Wages payable    0236Unearned computer services revenue    0307Common stock    68,000318Retained earnings    0319Dividends 6,400   403Computer services revenue    32,959612Depreciation expense—Office equipment 0   613Depreciation expense—Computer equipment 0   623Wages expense 2,125   637Insurance expense 0   640Rent expense 0   652Computer supplies expense 0   655Advertising expense 1,688   676Mileage expense 684   677Miscellaneous expenses 190   684Repairs expense—Computer 745    Totals$100,959 $100,959

 

Business Solutions had the following transactions and events in December 2019.   

 

Dec.2 Paid $995 cash to Hillside Mall for Business Solutions' share of mall advertising costs. 3 Paid $490 cash for minor repairs to the company's computer. 4 Received $4,250 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' bid of $7,600 on a proposed project has been accepted. Alex's paid a $2,300 cash advance to Business Solutions. 15 Purchased $1,600 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 $5,825 cash. 22-26 Took the week off for the holidays. 28 Received $3,900 cash from Gomez Co. on its receivable. 29 Reimbursed S. Rey for business automobile mileage (500 miles at $0.25 per mile). 31 The company paid $1,300 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.

 

1. The December 31 inventory count of computer supplies shows $640 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Lyn Addie has not been paid for four days of work at $105 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. 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.  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.  an adjusted trial balance as of December 31, 2019.

4. an income statement for the three months ended December 31, 2019.

5.  a statement of retained earnings for the three months ended December 31, 2019.

6.  a balance sheet as of December 31, 2019.

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.  a post-closing trial balance as of December 31, 2019.