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1.

value:

70.00 points

Serial Problem Business Solutions L.O. P1, P2, P3, P4, P5

After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2011, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2011) follows. 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 depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Accounts payable Wages payable Unearned computer services revenue Common stock Retained earnings Dividends Computer services revenue Depreciation expenseOffice equipment Depreciation expenseComputer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expenseComputer Totals Debit $ 38,264 12,618 2,545 2,220 3,300 8,000 $ 20,000 0 0 0 0 73,000 0 5,600 25,659 0 0 2,625 0 0 0 1,728 704 250 805 $ 98,659 $ 98,659 Credit

Business Solutions had the following transactions and events in December 2011. Dec. 2 Paid $1,025 cash to Hillside Mall for Business Solutions share of mall advertising costs. 3 Paid $500 cash for minor repairs to the companys computer. 4 Received $3,950 cash from Alexs 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 bid of $7,000 on a proposed project has been accepted. Alexs paid a $1,500 cash advance to Business Solutions. 15 Purchased $1,100 of computer supplies on credit from Harris Office Products. 16 20 22 26 28 29 31 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. Completed a project for Liu Corporation and received $5,625 cash. Took the week off for the holidays. Received $3,000 cash from Gomez Co. on its receivable. Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). The business paid $1,500 cash for 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. b. c. d. e. f. 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 company's computer is expected to have a four-year life with no salvage value. The office equipment is expected to have a five-year life with no salvage value. Three of the four months' prepaid rent has expired.

Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Date Dec. 2 General Journal Advertising expense Debit 1025 Credit

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Dec. 2 Advertising expense Cash 3 Repairs expense-computer Cash 4 Cash Accounts receivable 10 Wages expense Cash 14 Cash

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1025 1025 500 500 3950 3950 750 750 1500 1500 1100 1100 0 0 5625 5625

Unearned computer services revenue 15 Computer supplies Accounts payable 16 No journal entry required No journal entry required 20 Cash Computer services revenue

28

Cash Accounts receivable

3000 3000 192 192 1500 1500

29

Mileage expense Cash

31

Dividends Cash

2.1 Prepare adjusting entries to reflect a through f. (Omit the "$" sign in your response.) Date Dec. 31 General Journal Computer supplies expense Computer supplies 555 555 Debit 3065 Credit

3065

Insurance expense Prepaid insurance Wages expense Wages payable Depreciation expense-computer equipment Accumulated depreciation-computer equipment

500 500

1250 1250

Depreciation expense-office equipment Accumulated depreciation-office equipment

400 400

Rent expense Prepaid rent

2475 2475

2.2 Post the journal entries to record each of the December transactions and adjusting entries to the accounts in the ledger. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

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General Ledger Accounts Cash Date Dec. 1 2 3 4 10 14 20 28 29 31 Debit 0 Credit 0 Acct. No. 101 Balance 38264

0 0 3950 0 1500 5625 3000 0 0

1025 500 0 750 0 0 0 192 1500

37239 36739 40689 39939 41439 47064 50064 49872 48372 Acct. No. 106 Balance 12618 8668 5668 Acct. No. 126 Balance 2545 3645 580 Acct. No. 128 Balance 2220 1665 Acct. No. 131 Balance 3300 825 Acct. No. 163 Balance 8000 Acct. No. 164 Balance 0 400 Acct. No. 167 Balance 20000 Acct. No. 168

Date Dec. 1 4 28

Accounts Receivable Debit 0 0 0

Credit 0 3950 3000

Date Dec. 1 15 31

Computer Supplies Debit 0 1100 0

Credit 0 0 3065

Date Dec. 1 31

Prepaid Insurance Debit 0 0

Credit 0 555

Prepaid Rent Date Dec. 1 31 Debit 0 0 Credit 0 2475

Date Dec. 1

Office Equipment Debit 0

Credit 0

Date Dec.

Accumulated DepreciationOffice Equipment Debit Credit 0 1 0 0 400

31

Date Dec. 1

Computer Equipment Debit 0

Credit 0

Accumulated DepreciationComputer Equipment

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Date Dec. 1 31 Debit 0 0

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Credit 0 1250 Balance 0 1250 Acct. No. 201 Balance 0 1100 Acct. No. 210 Balance 0 500 Acct. No. 236 Balance 0 1500 Acct. No. 307 Balance 73000

Date Dec. 1 15

Accounts Payable Debit 0 0

Credit 0 1100

Date Dec. 1 31

Wages Payable Debit 0 0

Credit 0 500

Date Dec. 1 14

Unearned Computer Services Revenue Debit Credit 0 0 0 1500

Date Dec. 1

Common Stock Debit 0

Credit 0

Date Dec. 1 31 31

Retained Earnings Debit 0 0 7100

Credit 0 14460 0

Acct. No. 318 Balance 0 14460 7360 Acct. No. 319 Balance 5600 7100 0 Acct. No. 403 Balance 25659 31284 0 Acct. No. 612 Balance 0 400 0 Acct. No. 613 Balance 0 1250 0

Dividends Date Dec. 1 31 31 Debit 0 0 0 Credit 0 1500 7100

Date Dec. 1 20 31

Computer Services Revenue Debit Credit 0 0 0 31284 5625 0

Date Dec. 1 31 31

Depreciation ExpenseOffice Equipment Debit Credit 0 0 400 0 0 400

Date Dec.

Depreciation ExpenseComputer Equipment Debit Credit 0 1 0 1250 0 0 1250

31 31

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Date Dec. 1 10 31 31

Wages Expense Debit 0 750 500 0

Credit 0 0 0 3875

Acct. No. 623 Balance 2625 3375 3875 0

Date Dec. 1 31 31

Insurance Expense Debit 0 555 0

Credit 0 0 555

Acct. No. 637 Balance 0 555 0 Acct. No. 640 Balance 0 2475 0 Acct. No. 652 Balance 0 3065 0 Acct. No. 655 Balance 1728 2753 0 Acct. No. 676 Balance 704 896 0 Acct. No. 677 Balance 250 0

Rent Expense Date Dec. 1 31 31 Debit 0 2475 0 Credit 0 0 2475

Date Dec. 1 31 31

Computer Supplies Expense Debit Credit 0 0 3065 0 0 3065

Date Dec. 1 2 31

Advertising Expense Debit 0 1025 0

Credit 0 0 2753

Date Dec. 1 29 31

Mileage Expense Debit 0 192 0

Credit 0 0 896

Date Dec. 1 31

Miscellaneous Expenses Debit Credit 0 0 0 250

Date Dec. 1 3 31

Repairs Expense - Computer Debit Credit 0 0 500 0 0 1305

Acct. No. 684 Balance 805 1305 0 Acct. No. 901 Balance

Date

Income Summary Debit

Credit

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31 31 31 0 16824 14460

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31284 0 0 31284 14460 0

3. Prepare an adjusted trial balance as of December 31, 2011. (The items in the Trial Balance should be grouped as follows: Assets and Liabilities (in order of their liquidity) then Equity, Revenues, and Expenses. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) BUSINESS SOLUTIONS Adjusted Trial Balance December 31, 2011 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 $ Debit 48372 5668 580 1,665 825 8,000 0 20000 0 0 0 0 Credit $ 0 0 0 0 0 400 0 1250 1100 500 1500 0

Common stock 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 $

0 7100 0 400 1,250 3,875 555 2,475 3,065 2,753 896 250 1,305

73000 0 31284 0 0 0 0 0 0 0 0 0 0

Totals

109034

109034

4. Prepare an income statement for the three months ended December 31, 2011. (Input all amounts as positive values. Omit the "$" sign in your response.)

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BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2011 Debit Revenue Computer services revenue Expenses 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 $ 400 1,250 3,875 555 2,475 3,065 2,753 896 250 1,305 $ 31284 Credit

Total expenses $

16824

Net income

14460

5. Prepare a statement of retained earnings for the three months ended December 31, 2011. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.) BUSINESS SOLUTIONS Statement of Retained Earnings For Three Months Ended December 31, 2011 $ Retained earnings, October 1, 2011 Add: Net income 14460 14460 Less: Dividends Retained earnings, December 31, 2011 $ 7100 7360

6. Prepare a balance sheet as of December 31, 2011. (Be sure to list the assets and liabilities in order of their liquidity. Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.) BUSINESS SOLUTIONS Balance Sheet December 31, 2011 Assets Cash Accounts receivable Prepaid insurance Prepaid rent Computer supplies Office equipment Accumulated depreciation-office equipment Computer equipment $ 8000 -400 20000 7600 $ 48372 5668 1,665 825 580

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Accumulated depreciation-computer equipment Total Assets Liabilities Accounts payable Wages payable Unearned computer services revenue Total Liabilities Equity Common stock Retained earnings Total Equity Total Liabilities and Equity $ $ 1100 500 1,500 3100 73000 7360 80360 83460 -1250 $ 18750 83460

7. Record and post the necessary closing entries for Business Solutions. (Omit the "$" sign in your response.) Date Dec. 31, 2011 General Journal Computer services revenue Income summary Debit 31284 31284 Credit

Dec. 31, 2011

Income summary Depreciation expenseoffice equipment Depreciation expensecomputer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-computer

16824 400 1,250 3,875 555 2,475 3,065 2,753 896 250 1,305

Dec. 31, 2011

Income summary Retained earnings

14460 14460

Dec. 31, 2011

Retained earnings Dividends

7100 7100

8. Prepare a post-closing trial balance as of December 31, 2011. (The items in the Trial Balance should be grouped as follows: Assets and Liabilities (in order of their liquidity) then Equity, Revenues, and Expenses. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) BUSINESS SOLUTIONS Post-Closing Trial Balance December 31, 2011

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Debit 48372 5668 580 1,665 825 8,000 0 20000 0 0 0 $ Credit 0 0 0 0 0 0 400 0 1250 1100 500

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 $

0 0 0

1500 73000 7360

Totals

85110

85110

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