90.2K

Verified Solution

Link Copied!

SP 3 Serial Problem Business Solutions (Algo) LO P1, P2, P3, P4, P5 After the success of the company's 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. Business Solutions had the following transactions and events in December 2021. December 2 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $440 cash for minor repairs to the company's computer. December 4 Received $4,150 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 $125 per day. accepted. Alex's paid a $2,200 cash advance to Business solutions. December 15 Purchased $1,400 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 $5,775 cash. December 20 Completed a project for Liu Corporation and received $5,775 cash. December 22-26 Took the week off for the holidays. December 28 Received $3,400 cash from Gomez Company on its receivable. December 29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.23 per mile). December 31 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. The December 31 inventory count of computer supplies shows $620 still available. b. Three months have expired since the 12 -month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day. d. The computer system, acquired on October 1 , is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1 , is expected to have a five-year life with no salvage value. f. 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. Complete this question by entering your answers in the tabs below. Dronaro an adiuctod trial halanro ae of noromhor 21 n1

Answer & Explanation Solved by verified expert

See Answer