Question

On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2017. The company’s initial chart of accounts follows.

Account	No.		Account	No.
Cash	101		Common Stock	307
Accounts Receivable	106		Dividends	319
Computer Supplies	126		Computer Services Revenue	403
Prepaid Insurance	128		Wages Expense	623
Prepaid Rent	131		Advertising Expense	655
Office Equipment	163		Mileage Expense	676
Computer Equipment	167		Miscellaneous Expenses	677
Accounts Payable	201		Repairs Expense—Computer	684

Oct.		1		S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock.
		2		The company paid $3,300 cash for four months’ rent. (Hint: Debit Prepaid Rent for $3,300.)
		3		The company purchased $1,420 of computer supplies on credit from Harris Office Products.
		5		The company paid $2,220 cash for one year’s premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,220.)
		6		The company billed Easy Leasing $4,800 for services performed in installing a new Web server.
		8		The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3.
		10		The company hired Lyn Addie as a part-time assistant for $125 per day, as needed.
		12		The company billed Easy Leasing another $1,400 for services performed.
		15		The company received $4,800 cash from Easy Leasing as partial payment on its account.
		17		The company paid $805 cash to repair computer equipment that was damaged when moving it.
		20		The company paid $1,728 cash for advertisements published in the local newspaper.
		22		The company received $1,400 cash from Easy Leasing on its account.
		28		The company billed IFM Company $5,208 for services performed.
		31		The company paid $875 cash for Lyn Addie's wages for seven days' work.
		31		The company paid $3,600 cash in dividends.
Nov.		1		The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.32 per mile).
		2		The company received $4,633 cash from Liu Corporation for computer services performed.
		5		The company purchased computer supplies for $1,125 cash from Harris Office Products.
		8		The company billed Gomez Co. $5,668 for services performed.
		13		The company received notification from Alex’s Engineering Co. that Business Solutions’s bid of $3,950 for an upcoming project was accepted.
		18		The company received $2,208 cash from IFM Company as partial payment of the October 28 bill.
		22		The company donated $250 cash to the United Way in the company's name.
		24		The company completed work and sent a bill for $3,950 to Alex’s Engineering Co.
		25		The company sent another bill to IFM Company for the past-due amount of $3,000.
		28		The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.32 per mile).
		30		The company paid $1,750 cash for Lyn Addie's wages for 14 days' work.
		30		The company paid $2,000 cash in dividends.

Required:

1. Prepare journal entries in the General Journal to record each of the above transactions for Business Solutions. file:///D:/UAFS/Serial%20Problem%202%20Workpapers%20General%20Journal.pdf

2. Post the journal entries from requirement #1 to the General Ledger . file:///D:/UAFS/Serial%20Problem%202%20Workpapers%20General%20Ledger%20Trial%20Balance.pdf

3. Prepare a trial balance as of the end of November on the worksheet labeled Trial Balance in #2

Answer 1

1)
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/1	Cash	Dr	$45,000.00
	Computer System	Dr	$20,000.00
	Office Equipment	Dr	$ 8,000.00
	To Share Capital a/c	Cr		$73,000.00
	Being Cash ,Computer system and Offcie equipment contributed as capital
Assets coming in debited and credited capital
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/2	Prepaid Rent a/c	Dr	$ 3,300.00
	To Cash a/c	Cr		$ 3,300.00
	Being Rent paid for four months accounted for
As rent paid in advance debited to prepaid rent a/c and cash credited
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/3	Computer Supplies a/c	Dr	$ 1,420.00
	To Accounts Payable a/c	Cr		$ 1,420.00
	Being computer supply purchased on account from harris office product
Computer supply debited and account payable credited
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/5	Prepaid Insurance	Dr	$ 2,220.00
	To Cash a/c	Cr		$ 2,220.00
	Being property and liability insurance paid for a year
Insurance paid for a year debited to prepaid insurance and credit cash
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/6	Accounts Receivable a/c	Dr	$ 4,800.00
	To Service Revenue	Cr		$ 4,800.00
	Being Service rendered on account
Service rendered to easy leasing which was debit to accounts receivable and credit sales
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/8	Computer Supplies a/c	Dr	$ 1,420.00
	To Accounts Payable a/c	Cr		$ 1,420.00
	Being computer supply purchased on account from harris office product
Computer supply debited and account payable credited
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/10	No entry required	Dr
	No entry required	Cr		$            -
Just hired staff not yet paid
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/12	Accounts Receivable a/c	Dr	$ 1,400.00
	To Service Revenue	Cr		$ 1,400.00
	Being Service rendered on account
Service rendered to easy leasing which was debit to accounts receivable and credit sales
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/15	Cash a/c	Dr	$ 4,800.00
	To Account Receivable a/c	Cr		$ 4,800.00
	Being Payment received from customer
easy leasing paid the outstnading debited cash and credit AR
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/15	Repair Expesne -Computer	Dr	$     805.00
	To Cash A/c	Cr		$     805.00
	Being cash paid for computer repair
cash paid for computer repair
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/20	Advertise Expense a/c	Dr	$ 1,728.00
	To Cash A/c	Cr		$ 1,728.00
	Being Advertisement Expense paid in cash accounted
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/20	Cash a/c	Dr	$ 1,400.00
	To Account Receivable a/c	Cr		$ 1,400.00
	Being Payment received from customer
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/28	Accounts Receivable a/c	Dr	$ 5,208.00
	To Service Revenue	Cr		$ 5,208.00
	Being Service rendered on account
Service rendered to easy leasing which was debit to accounts receivable and credit sales
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/31	Wages Expense a/c	Dr	$     875.00
	To Cash	Cr		$     875.00
	Being Wages paid
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/31	Dividend a/c	Dr	$ 3,600.00
	To Cash	Cr		$ 3,600.00
	Being Dividend paid
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/1	Milage Expense a/c	Dr	$     320.00
	To Cash	Cr		$     320.00
	Being milage Expesne paid in cash
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/2	Cash a/c	Dr	$ 4,633.00
	To Service Revenue	Cr		$ 4,633.00
	Being Service rendered agaisnt Cash
Date	Account Titles and Explanation	Ref	Debit	Credit
11/5	Computer Supplies a/c	Dr	$ 1,125.00
	To Cash a/c	Cr		$ 1,125.00
	Being computer supply purchased on account from harris office product
Computer supply debited and account payable credited
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/8	Accounts Receivable a/c	Dr	$ 5,668.00
	To Service Revenue	Cr		$ 5,668.00
	Being Service rendered on account
Service rendered to easy leasing which was debit to accounts receivable and credit sales
13-Nov	NO entry required as its bid is accepted
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/18	Cash a/c	Dr	$ 2,208.00
	To Account Receivable a/c	Cr		$ 2,208.00
	Being Payment received from customer
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/22	Miscellaneous Expense	Dr	$     250.00
	To Cash a/c	Cr		$     250.00
	Being Payment received from customer
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/24	Accounts Receivable a/c	Dr	$ 3,950.00
	To Service Revenue	Cr		$ 3,950.00
	Being Service rendered on account
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/25	Accounts Receivable a/c	Dr	$ 3,000.00
	To Service Revenue	Cr		$ 3,000.00
	Being Service rendered on account
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/28	Milage Expense a/c	Dr	$     384.00
	To Cash	Cr		$     384.00
	Being milage Expesne paid in cash
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
11/30	Wages Expense a/c	Dr	$ 1,750.00
	To Cash	Cr		$ 1,750.00
	Being Wages paid
General Journal
Date	Account Titles and Explanation	Ref	Debit	Credit
10/31	Dividend a/c	Dr	$ 2,000.00
	To Cash	Cr		$ 2,000.00
	Being Dividend paid

2) Trail Balance

		(Amount in $)
Trial balance
Nov 30 2019
	Debit	credit
cash	39,684.00
Computer System	20,000.00
Office Equipment	8,000.00
To Share Capital a/c		73,000.00
Prepaid Rent a/c	3,300.00
Computer Supplies a/c	3,965.00
To Accounts Payable a/c		2,840.00
Prepaid Insurance	2,220.00
Accounts Receivable a/c	15,618.00
Dividend	5,600.00
unearned revenue
Repair Expense -computer	805.00
Advertise expense	1,728.00
service revenue		28,659.00
Wages Expense	2,625.00
Milage Expense	704.00
Miscellaneous expense	250.00
	104,499.00	104,499.00