After the success of the companys first two months, Santana Rey continues to operate Business Solutions. The November 30, 2021, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2021) follows.

Number	Account Title	Debit	Credit
101	Cash	$ 38,664
106	Accounts receivable	12,918
126	Computer supplies	2,645
128	Prepaid insurance	2,100
131	Prepaid rent	3,260
163	Office equipment	8,200
164	Accumulated depreciationOffice equipment		$ 0
167	Computer equipment	23,200
168	Accumulated depreciationComputer equipment		0
201	Accounts payable		0
210	Wages payable		0
236	Unearned computer services revenue		0
307	Common stock		68,000
318	Retained earnings		0
319	Dividends	6,200
403	Computer services revenue		34,649
612	Depreciation expenseOffice equipment	0
613	Depreciation expenseComputer equipment	0
623	Wages expense	2,225
637	Insurance expense	0
640	Rent expense	0
652	Computer supplies expense	0
655	Advertising expense	1,648
676	Mileage expense	634
677	Miscellaneous expenses	220
684	Repairs expenseComputer	735
901	Income summary		0
	Totals	$ 102,649	$ 102,649

Business Solutions had the following transactions and events in December 2021.

December 2	Paid $965 cash to Hillside Mall for Business Solutions's share of mall advertising costs.
December 3	Paid $470 cash for minor repairs to the companys computer.
December 4	Received $3,950 cash from Alexs Engineering Company for the receivable from November.
December 10	Paid cash to Lyn Addie for six days of work at the rate of $110 per day.
December 14	Notified by Alexs Engineering Company that Business Solutions's bid of $7,800 on a proposed project has been accepted. Alexs paid a $2,500 cash advance to Business Solutions.
December 15	Purchased $1,800 of computer supplies on credit from Harris Office Products.
December 16	Sent a reminder to Gomez Company to pay the fee for services recorded on November 8.
December 20	Completed a project for Liu Corporation and received $6,525 cash.
December 22-26	Took the week off for the holidays.
December 28	Received $3,500 cash from Gomez Company on its receivable.
December 29	Reimbursed S. Rey for business automobile mileage (600 miles at $0.30 per mile).
December 31	Paid $1,300 cash for 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 $660 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 $110 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. Post those entries to the accounts in the ledger.

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, 2021.

4. Prepare an income statement for the three months ended December 31, 2021.

5. Prepare a statement of retained earnings for the three months ended December 31, 2021.

6. Prepare a classified balance sheet as of December 31, 2021.

7. Record the necessary closing entries as of December 31, 2021.

8. Prepare a post-closing trial balance as of December 31, 2021.

• 000: No journal entry required
• 101: Cash
• 106: Accounts receivable
• 126: Computer supplies
• 128: Prepaid insurance
• 131: Prepaid rent
• 163: Office equipment
• 164: Accumulated depreciationOffice equipment
• 167: Computer equipment
• 168: Accumulated depreciationComputer equipment
• 201: Accounts payable
• 210: Wages payable
• 236: Unearned computer services revenue
• 307: Common stock
• 318: Retained earnings
• 319: Dividends
• 403: Computer services revenue
• 612: Depreciation expenseOffice equipment
• 613: Depreciation expenseComputer 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 expenseComputer