In: Accounting
After the success of the company’s first two months, Santana Rey
continues to operate Business Solutions. The November 30, 2019,
unadjusted trial balance of Business Solutions (reflecting its
transactions for October and November of 2019) follows.
No. | Account Title | Debit | Credit | |||
101 | Cash | $ | 38,264 | |||
106 | Accounts receivable | 12,618 | ||||
126 | Computer supplies | 2,545 | ||||
128 | Prepaid insurance | 2,220 | ||||
131 | Prepaid rent | 3,300 | ||||
163 | Office equipment | 8,000 | ||||
164 | Accumulated depreciation—Office equipment | $ | 0 | |||
167 | Computer equipment | 20,000 | ||||
168 | Accumulated depreciation—Computer equipment | 0 | ||||
201 | Accounts payable | 0 | ||||
210 | Wages payable | 0 | ||||
236 | Unearned computer services revenue | 0 | ||||
307 | Common stock | 73,000 | ||||
318 | Retained earnings | 0 | ||||
319 | Dividends | 5,600 | ||||
403 | Computer services revenue | 25,659 | ||||
612 | Depreciation expense—Office equipment | 0 | ||||
613 | Depreciation expense—Computer equipment | 0 | ||||
623 | Wages expense | 2,625 | ||||
637 | Insurance expense | 0 | ||||
640 | Rent expense | 0 | ||||
652 | Computer supplies expense | 0 | ||||
655 | Advertising expense | 1,728 | ||||
676 | Mileage expense | 704 | ||||
677 | Miscellaneous expenses | 250 | ||||
684 | Repairs expense—Computer | 805 | ||||
Totals | $ | 98,659 | $ | 98,659 | ||
Business Solutions had the following transactions and events in
December 2019.
Dec. | 2 | Paid $1,025 cash to Hillside Mall for Business Solutions’ share of mall advertising costs. | |
3 | Paid $500 cash for minor repairs to the company’s computer. | ||
4 | Received $3,950 cash from Alex’s Engineering Co. for the receivable from November. | ||
10 | Paid cash to Lyn Addie for six days of work at the rate of $125 per day. | ||
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. | ||
15 | Purchased $1,100 of computer supplies on credit from Harris Office Products. | ||
16 | Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. | ||
20 | Completed a project for Liu Corporation and received $5,625 cash. | ||
22–26 | Took the week off for the holidays. | ||
28 | Received $3,000 cash from Gomez Co. on its receivable. | ||
29 | Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile). | ||
31 | The company paid $1,500 cash in 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.
Prepare a balance sheet as of December 31, 2019.
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Balance Sheet in Simple format:
Balance Sheet | ||
BUSINESS SOLUTIONS | ||
Balance Sheet as at Dec.31, 2019 | ||
Assets | ||
Cash | $ 48,372 | |
Accounts Receivable | $ 5,668 | |
Computer Supplies | $ 580 | |
Prepaid Insurance | $ 1,665 | |
Prepaid Rent | $ 825 | |
Office Equipment | $ 8,000 | |
Accumu. Depreciation-Office Equip. | $ -400 | $ 7,600 |
Computer Equipment | $ 20,000 | |
Accumu. Depreciation-Computer Equip. | $ -1,250 | $ 18,750 |
Total Assets | $ 83,460 | |
Liabilities | ||
Accounts Payable | $ 1,100 | |
Wages Payable | $ 500 | |
Unearned Computer Service Revenue | $ 1,500 | |
Total Liabilities | $ 3,100 | |
Stockholder's Equity | ||
Common Stock | $ 73,000 | |
Retained Earnings | $ 7,360 | |
Total Liabilities and Stockholder's Equity | $ 83,460 |
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