29 Jun Question After the success of the companys first two months, Santana
Question
After the success of the companys first two months, Santana
After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2011, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2011) follows.
101
Cash
$
38,764
106
Accounts receivable
13,618
126
Computer supplies
2,645
128
Prepaid insurance
2,160
131
Prepaid rent
2,960
163
Office equipment
8,700
164
Accumulated depreciation—Office equipment
$
0
167
Computer equipment
20,800
168
Accumulated depreciation—Computer equipment
0
201
Accounts payable
0
210
Wages payable
0
236
Unearned computer services revenue
0
301
S. Rey, Capital
66,000
302
S. Rey, Withdrawals
6,100
403
Computer services revenue
35,459
612
Depreciation expense—Office equipment
0
613
Depreciation expense—Computer equipment
0
623
Wages expense
2,525
637
Insurance expense
0
640
Rent expense
0
652
Computer supplies expense
0
655
Advertising expense
1,638
676
Mileage expense
604
677
Miscellaneous expenses
200
684
Repairs expense—Computer
745
Totals
$
101,459
$
101,459
Business Solutions had the following transactions and events in December 2011.
Dec.
2
Paid $1,005 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.
3
Paid $400 cash for minor repairs to the company’s computer.
4
Received $4,050 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 $105 per day.
14
Notified by Alex’s Engineering Co. that Business Solutions’ bid of $8,000 on a proposed project has been accepted. Alex’s paid a $1,700 cash advance to Business Solutions.
15
Purchased $1,400 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 $6,075 cash.
22–26
Took the week off for the holidays.
28
Received $3,400 cash from Gomez Co. on its receivable.
29
Reimbursed S. Rey for business automobile mileage (400 miles at $0.32 per mile).
31
S. Rey withdrew $1,300 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 $630 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 $105 per day.
d.
The company’s computer is expected to have a four-year life with no salvage value.
e.
The office equipment is expected to have a five-year life with no salvage value.
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