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After the success of the companys 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.

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No.	Account Title	Debit			Credit
101	Cash	$	38,964
106	Accounts receivable		12,818
126	Computer supplies		2,645
128	Prepaid insurance		1,920
131	Prepaid rent		2,920
163	Office equipment		8,700
164	Accumulated depreciationOffice equipment				$	0
167	Computer equipment		21,200
168	Accumulated depreciationComputer 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					29,444
612	Depreciation expenseOffice equipment		0
613	Depreciation expenseComputer equipment		0
623	Wages expense		2,150
637	Insurance expense		0
640	Rent expense		0
652	Computer supplies expense		0
655	Advertising expense		1,698
676	Mileage expense		644
677	Miscellaneous expenses		240
684	Repairs expenseComputer		745
	Totals	$	100,444		$	100,444

Business Solutions had the following transactions and events in December 2017.

Dec.	2		Paid $955 cash to Hillside Mall for Business Solutions share of mall advertising costs.
	3		Paid $480 cash for minor repairs to the companys computer.
	4		Received $4,350 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 $100 per day.
	14		Notified by Alexs Engineering Co. that Business Solutions bid of $7,400 on a proposed project has been accepted. Alexs paid a $1,800 cash advance to Business Solutions.
	15		Purchased $1,500 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 $6,375 cash.
	2226		Took the week off for the holidays.
	28		Received $3,600 cash from Gomez Co. on its receivable.
	29		Reimbursed S. Rey for business automobile mileage (400 miles at $0.26 per mile).
	31		The company paid $1,400 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the companys first three months:

1. The December 31 inventory count of computer supplies shows $590 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 $100 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 has 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, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2017. 4. Prepare an income statement for the three months ended December 31, 2017. 5. Prepare a statement of retained earnings for the three months ended December 31, 2017. 6. Prepare a balance sheet as of December 31, 2017. 7. Record and post the necessary closing entries as of December 31, 2017. 8. Prepare a post-closing trial balance as of December 31, 2017.

1)

2)

2b)3)4)

5)

6)

7)

8)

6 Purchased $1,500 of computer supplies on credit from Harris Office Products 7 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8 8 Completed a project for Liu Corporation and received $6,375 cash 9 Received $3,600 cash from Gomez Co. on its receivable. 10 Reimbursed S. Rey for business automobile mileage (400 miles at $0.26 per mile) 11 The company paid $1,400 cash in dividends. 1 The December 31 inventory count of computer supplies shows $590 still available. 2 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 $100 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. Cash Accounts Receivable Credit Debit Credit Date Balance Date Debit Balance Dec. 01 Dec. 01 38,964 12,818 Dec. 02 Dec. 04 955 38,009 4,350 17,168 Dec. 03 Dec. 28 13,568 480 37,529 3,600 Dec. 04 4,350 33,179 Dec. 10 600 32,579 Dec. 14 1,800 34,379 Dec. 28 3,600 37,979 Dec. 29 104 37,875 Dec. 31 1,400 36,475 Computer Supplies Prepaid Insurance Date Debit Credit Balance Date Debit Credit Balance Dec. 01 2,645 Dec. 01 1,920 Dec. 15 Dec. 31 480 1,500 4,145 1,440 Office Equipment Prepaid Rent Date Debit Credit Balance Date Debit Credit Balance Dec. 01 2,920 Dec. 01 8,700 Dec. 31 2,190 730 Accumulated Depreciation-Office Equipment Computer Equipment Date Debit Credit Balance Date Debit Credit Balance Dec. 01 Dec. 01 21,200 Dec. 31 Dec. 31 3,480 3,480 590 20,610 Accumulated Depreciation-Computer Equipment Accounts Payable Date Debit Credit Balance Date Debit Credit Balance Dec. 01 0 Dec. 01 0 Wages Payable Unearned Computer Services Revenue Balance Date Debit Credit Balance Date Debit Credit Dec. 01 0 Dec. 01 0 Dec. 10 600 Dec. 14 (600) 1,800 1,800 Dec. 31 400 (200) Retained Earnings Common Stock Date Debit Credit Balance Date Debit Credit Balance Dec. 01 71,000 Dec. 01 Computer Services Revenue Dividends Date Debit Debit Credit Balance Date Credit Balance Dec. 01 29,444 5,800 Dec. 01 Dec. 31 1,400 7,200 Depreciation Expense-Office Equipment Depreciation Expense Computer Equipment Debit Credit Balance Date Debit Credit Balance Date Dec. 01 Dec. 01 0 0 Dec. 31 Dec. 31 3,480 3,480 750 750 Wages Expense Insurance Expense Date Debit Credit Balance Date Debit Credit Balance Dec. 01 2,150 Dec. 01 Dec. 31 Dec. 31 400 2,550 480 480 2,550 2,550 Rent Expense Computer Supplies Expentse Credit Debit Credit Date Debit Balance Date Balance Dec. 01 Dec. 01 Dec. 31 Dec. 31 590 2,190 590 2,190 BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2017 Revenue $ Computer services revenue 29,444 Expenses $ Depreciation expense-Office equipment 3,480 Depreciation expense Computer equipment 750 Wages expense 2,550 Insurance expense 480 Rent expense 2,190 Computer supplies expense 590 Advertising expense 2,653 Mileage expense 748 Repairs expense-Computer 1,225 Miscellaneous expenses 240 Total expenses 14,906 Net income 14,778

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