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Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2021. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts. Number 101 106.1 106.2 106.3 Easy Leasing 106.4 IFM Company 106.5 Liu Corporation Gomez Company 106.6 106.7 Delta Company 106.8 106.9 119 126 128 131 163 164 167 168 201 210 236 307 318 319 403 413 414 ATE Account Title Cash Alex's Engineering Company Wildcat Services KC, Incorporated Dream, Incorporated Merchandise inventory 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 Sales Sales returns and allowances 11110 31 Debit $ 48,372 HUMBERT 0 0 0 3,000 0 2,668 0 0 0 0 580 1,665 825 8,000 20,000 0 0 A Credit $ 400 1,250 1,100 500 1,500 73,000 7,360 0 0

Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2021. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Recelvable account. This change allows the company to continue using the existing chart of accounts. In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10,n/30,FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Numbers. 119,413,414,415, and 502 ) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow. January 4 The company paid cash to Lyn Addie for five days" work at the rate of $125 per day. Four of the five days relate to wagea payable that were accrued in the prior year. January 5 Santana Rey invested an additional $25,000 cash in the company in exchange for more comnon stoek. January 7 The company purchased $5,800 of merchandise from Kansas Corporation with terms of 1/10, n/30, FOB shipping point, invoice dated January 7. January 9 The company received $2,668 cash from Gomez company as ful1 payment on its account. January 11 The company completed a five-day project for Alex's Engineering Conpany and billed it \$5, 500 , which is the total price of $7,000 less the advance payment of $1,500. The company debited Unearned Computer Services Revenue for $1,500. January 13 The company sold merchandise with a retail value of $5,200 and a cost of $3,560 to Liv Corporation, invoice dated January 13. January 15 The company paid $600 cash for freight charges on the merchandise purchased on January 7. January 16 The company received $4,000 cash from Delta Company for computer services provided. January 17 The company paid Kansas Corporation for the invoice dated January 7 , net of the discount. January 20 The company gave a price reduction (allowance) of $500 to Liu Corporation and credited tiu's accounts receivable for that amount. January 22 The company received the balance due from Liu Corporation, net of the discount and the allowance. January 24 The company returned defective merchandise to Kansas corporation and accepted a credit against January 24 The company returned defective merchandise to Kantas Corporation and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $496. January 26 The company purchased $9,000 of merchandise fron Kaneas Corporation with terms of 1/10, h/30, Fo destination, invoice dated January 26. January 26 The company sold merchandise with a $4,640 cost for $5,800 on credit to kc, Incorporated, involce dated January 26 January 31 The company paid cash to tyn Addie for 10 daya work at $125 per day. February 1 The company paid $2,475 cash to Hillside Nal1 for another three months' rent tn advance. February 3 The company pald Kansas Corporation for the balance due, net of the cash discount, less the 5496 credit from merchandise returned on January 24 . February 5 The company paid $600 eash to Tacebook for an advertisement to appear on February 5 only. February 11 The company recelved the balance due from klex' E Engineering company for fees bliled on January 11. February 15 The company pald a $4,800 cash dividend. February 23 The company gold merchandise with a $2,660 cost for $3,220 on eredit to Delta company, invoice dated rebruary 23 . February 26 The company padd cash to Lyn Addie for eigbt days' work at $125 per day. February 27 The company resmbureed Santana Rey $192 cash for busineso automobile mileage. The conpany recorded the reimbyrsenent an Hileage Rxpense, Narch 8 The company purcheded $2,730 of computer mupplies from Harris office Products on eredit with terins of n/30, ros destination, invoice dated Rarch 8 . March 9 The company received the balance due from Delta Company for merchandise sold on February 23. March 11. The company paid $960 cash for minor repairs to the company" iomputer. March 16 The company received $5,260 cash from Drean, Incorporated, for conputing bervices provided. March 16 The company received $5,260 cal from Drean, dncorporated, for conputing 19 The company paid the full amount due of $3,830 to Barris office Products, consisting of amounta ereated on pecenber 15 (of $1,100 ) and March 8 . March 24 The company billed Kasy Leasing for $9,047 of computing oervices provided. March 24 The company biled kasy deasing for $9,047 or compueing bervices provided. dated March 25 . March 30 The company sold merchandise with a $1,048 cost for $2,220 on eredit to IFr conpany, involce dated March 30. March 31 The company reimbursed Santana rey $128 cash for business automobile nileage. The company recorded the reimbursement as "Mileage Expense." The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation. The following additional facts are availoble for preparing adjustments on March 31 prior to financial statement preparation. a. The March 31 amount of computer supplies still available totals $2,005. b. Prepaid insurance coverage of $555 expired during this three-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $125 per day. d. Prepaid rent of $2,475 expired during this three-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,250. f. Depreciation on the office equipment for January 1 through March 31 is $400. 9. The March 31 amount of merchandise inventory still available totals $704. SP 4 Serial Problem Part 1 (Static) 1 The company paid cash to Lyn Addie for five days' work at the rate of $125 per day. Four of the five days relate to wages payable that were accrued in the prior year. 2 Santana Rey invested an additional $25,000 cash in the company. 3 The company purchased $5,800 of merchandise from Kansas Corporation with terms of 1/10,n/30, FOB shipping point, invoice dated January 7. 4 The company received $2,668 cash from Gomez Company as full payment on its account. 5 The company completed a five-day project for Alex's Engineering Company and billed it $5,500, which is the total price of $7,000 less the advance payment of $1,500. The company debited Unearned Computer Services Revenue for $1,500. 6 The company sold merchandise with a retail value of $5,200 and a cost of $3,560 to Liu Corporation, invoice dated January 13. 7 Record the cost of January 13 sale. 8 The company paid $600 cash for freight charges on the merchandise purchased on January 7 . 9 The company received $4,000 cash from Delta Company for computer services provided. 10 The company paid Kansas Corporation for the invoice dated January 7 , net of the discount. 11 The company gave a price reduction (allowance) of $500 to Liu Corporation and credited Liu's accounts receivable for that amount. 12 The company received the balance due from Liu Corporation, net of the discount and the allowance. 13 The company returned defective merchandise to Kansas Corporation and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $496. 14 The company purchased $9,000 of merchandise from Kansas Corporation with terms of 1/10,n/30, FOB destination, invoice dated January 26. 15 The company sold merchandise with a $4,640 cost for $5,800 on credit to KC, Incorporated, invoice dated January 26. 16 Record the cost of January 26 sale. 17 The company paid cash to Lyn Addie for 10 days' work at $125 per day. 18 The company paid $2,475 cash to Hillside Mall for another three months' rent in advance. 19 The company paid Kansas Corporated for the balance due, net of the cash discount, less the $496 credit from merchandise returned on January 24. 20 The company paid $600 cash to Facebook for an advertisement to appear on February 5 only. 21 The company received the balance due from Alex's Engineering Company for fees billed on January 11. 22 The company paid a $4,800 cash dividend. 23 The company sold merchandise with a $2,660 cost for $3,220 on credit to Delta Company, invoice dated February 23. 24 Record the cost of February 23 sale. 25 The company paid cash to Lyn Addie for eight days' work at $125 per day. 26 The company reimbursed Santana Rey $192 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 27 The company purchased $2,730 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8. 28 The company received the balance due from Delta Company for merchandise sold on February 23. 29 The company paid $960 cash for minor repairs to the company's computer. 30 The company received $5,260 cash from Dream, Incorporated, for computing services provided. 31 The company paid the full amount due of $3,830 to Harris Office Products, consisting of amounts created on Deremher 15 (nf \&1 1n) ) and Marrh 8 32 The company billed Easy Leasing for $9,047 of computing services provided. 33 The company sold merchandise with a $2,002 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. 34 Record the cost of March 25 sale. 35 The company sold merchandise with a $1,048 cost for $2,220 on credit to IFM Company, invoice dated March 30. 36 Record the cost of March 30 sale. 33 The company sold merchandise with a $2,002 cost for $2,800 on credit to Wildcat Services, invoice dated March 25. 34 Record the cost of March 25 sale. 35 The company sold merchandise with a $1,048 cost for $2,220 on credit to IFM Company, invoice dated March 30. 36 Record the cost of March 30 sale. 37 The company reimbursed Santana Rey $128 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." 2. Post the journal entries in part 1 to the accounts in the company's general ledger. Note: Begin with the ledger's post-closing adjusted balances as of December 31, 2021, \begin{tabular}{|c|c|c|c|} \hline \multicolumn{3}{|c|}{ 128: Prepaid Insurance } \\ \hline Date & Dobit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline & \multicolumn{3}{|c|}{ 131: Prepaid Rent } \\ \hline Date & Debit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ 163: Otfice Equipment } \\ \hline Date & Dobit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ 168: Accumulated Depreciation-Computer Equipment } \\ \hline Date & Debit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & \\ \hline & & \\ \hline & 210: Wages Payable \\ \hline Debit & Credit & Balance & \\ \hline December 31 & & \\ \hline \end{tabular} 236: Unearned Computer Services Revenue \begin{tabular}{|c|c|c|c|} \hline Dato & Debit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|l|c|c|} \hline \multicolumn{3}{|c|}{ 307: Cemmon stock } \\ \hline Date & Debit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{3}{|c|}{ 318: Retained earnings } \\ \hline Date & Debit & Credit & Balance \\ \hline December 31 & & & \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|c|}{ 319: Dividends } \\ \hline Date & Debit & Credit & Balance \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline Date & Dobit & Credit & Balance \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} 502: Cost of Goods Sold Date \begin{tabular}{|c|c|} \hline Debit & Credit \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} 613: Depreciation Expense-Computer Equipment Date Debit Credit Balance \begin{tabular}{|c|c|c|c|} \hline & \multicolumn{2}{|c|}{ 415: Sales Discounts } \\ \hline Date & Debit & Credit & Balance \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline \end{tabular} 612: Depreciation Expense-Office Equipment Date 623: Wages Expense Date Debit Credit Balance \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|c|}{ 640: Rent Expense: } \\ \hline Date & Debit & Credit & Balance \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{3}{|c|}{ 652: Computer Supplies Expense } \\ \hline Date & Debit & Credit & Balance \\ \hline & & & \\ \hline & & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular}

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