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You have been asked to prepare the financial statements for Computer Solutions for the

year ended December $31,2022.$ The following additional facts are collected for use in

making adjusting entries prior to preparing financial statements at year end $($Round all

calculations to the nearest dollar$)$:

a$.$ Interest expense on the mortgage is only for two months. Mortgage was taken

out on October $1,2022.$

b$.$ Customer note receivable dated November $14$ at $5\%$ interest due at maturity.

$($Use $360$ day year.$)$

c$.$ Lease with Sushi Coma began November $1,2022.$

d$.$ Prepaid insurance balance at December $31,2021$ was $$1,125$ representing

general liability insurance for January through March $2022.$ The general liability

annual premium of $$5,052$ was paid on April $1,2022$ and debited to prepaid

insurance account. One year$$s premium was paid on October $4,2022,$ for

property and liability insurance policy that began October $1,2022.$

e$.$ Received a statement from Nusbaum Realty indicating Computer Solutions had

paid rent of $$33,750$ for $2022.$

f$.$ R$.$ Santana estimates that $5\%$ of accounts receivable are uncollectible at

December $31,2022.$ To comply with GAAP Computer Solutions has decided to

use the allowance method of recording bad debts. $($Use AR balance from Part $3$

which should equal $$21,260$ to calculate allowance balance$)$

g$.$ On January $2,2023,$ R$.$ Santana billed Mason, Inc. $$8,750$ for computer services

completed on December $31,2022.$

h$.$ Computer supplies of $$453$ are on hand at December $31,2022.$

i$.$ A physical count of merchandise inventory was completed the morning of

January $2,2023,$ showing inventory on hand of $$6,092.$

j$.$ The following information is available relating to fixed assets at $12/31/22$:

Computer Equipment: Acquired $10/1/20$ at a cost of $$22,000,$ $$0$ residual

value expected, expected life of $5$ years, straight$-$line method of depreciation

Office Equipment: Acquired $10/1/20$ at a cost of $$5,000,$ $$0$ residual value

expected, expected life of $10$ years, straight$-$line method of depreciation.

Acquired $10/1/22$ at a cost of $$47,070$ and an expected residual value of

$$1,070,$ straight$-$line method of depreciation over a $10$ year useful life.

Building: Acquired $10/1/22$ at a cost of$$266,730$ and a residual value of

$$50,730.$ Useful life is estimated at $40$ years and the straight$-$line method of

depreciation is used by Computer Solutions.

Pay careful attention to date property acquired and number of months in

service during $2022!$

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