Business Solutions began operations on October 1, 2017. The November 30, 2017 un
ID: 2392729 • Letter: B
Question
Business Solutions began operations on October 1, 2017. The November 30, 2017 unadjusted trial balance is included on the trial balance tab. Record the following transactions and events for December, 2017.
Dec.
2
Paid $1,025 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.
Dec.
3
Paid $500 cash for minor repairs to the company’s computer.
Dec.
4
Received $3,950 cash from Alex’s Engineering Co. for the receivable from November.
Dec.
10
Paid cash to Lyn Addie for six days of work at the rate of $125 per day.
Dec.
14
Notified by Alex’s Engineering Co. that Business Solutions’ bid of $7,000 on a proposed project has been accepted. Alex’s paid a $1,500 cash advance to Business Solutions.
Dec.
15
Purchased $1,100 of computer supplies on credit from Harris Office Products.
Dec.
16
Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.
Dec.
20
Completed a project for Liu Corporation and received $5,625 cash.
Dec.
28
Received $3,000 cash from Gomez Co. on its receivable.
Dec.
29
Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile).
Dec.
31
S. Rey withdrew $1,500 cash from the company for personal use.
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 $580 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 has expired.
Also please include Impact on income:
Dec.
2
Paid $1,025 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.
Dec.
3
Paid $500 cash for minor repairs to the company’s computer.
Dec.
4
Received $3,950 cash from Alex’s Engineering Co. for the receivable from November.
Dec.
10
Paid cash to Lyn Addie for six days of work at the rate of $125 per day.
Dec.
14
Notified by Alex’s Engineering Co. that Business Solutions’ bid of $7,000 on a proposed project has been accepted. Alex’s paid a $1,500 cash advance to Business Solutions.
Dec.
15
Purchased $1,100 of computer supplies on credit from Harris Office Products.
Dec.
16
Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.
Dec.
20
Completed a project for Liu Corporation and received $5,625 cash.
Dec.
28
Received $3,000 cash from Gomez Co. on its receivable.
Dec.
29
Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile).
Dec.
31
S. Rey withdrew $1,500 cash from the company for personal use.
General Journal General Ledger St Owners Equity Income Trial BalanceStatement Impact on Income Requirement Balance Sheet You may view either the unadjusted or adjusted trial balance by choosing from the drop-down box below. Your choice will determine the reported values on the financial statement tabs . Unadjusted ? BUSINESS SOLUTIONS Trial Balance December 31, 2017 Account Title Debit Credit 48,372 5,668 3,645 2,220 3,300 8,000 20,000 Cash Acco Computer supplies Prepaid insurance Prepaid rent Office equipment Computer equipment Accounts payable Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals Computer services revenue Wages expense Advertising expense Mileage expense Miscellanous expenses Repairs expense Computer unts receivable 1,100 1,500 73,000 7,100 31,284 3,375 2,753 896 250 1,305 106,884 S Total 106,884Explanation / Answer
Adjusting entry related to : Account affecting the income statement balance sheet impact on net income a) Computer supplies (3645-580) comp supplie expense Computer supplies -3065 b)Prepaid Insurance (2,220/12*3) insurance expense prepaid insurance -555 c) Accrued wages (125*4) Wage expense Wages payable -500 d)Depreciation-computer Equipment (20,000/4)/12*3 Depreciation expnese Accumulated dep -1250 e)Depreciation-office Equipment (8000/5)/12*3 Depreciation expnese Accumulated dep -400 f)Prepaid rent (3300/4*3) rent expense prepaid rent -2475
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