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1/15 PBP purchased a camera fromGood Co. on account for $3000. The useful life is 5 years.

1/24 PBP purchased acomputer for $756. The useful life is 3 years.

1/26 PBP purchased a photoprinter for $1200. The useful life is 2 years.

1/26 PBP purchased photo suppliesfor $500.

1/31 PBP received a $300deposit from Mr. Moy to provide photography services at his weddingon February 4

2/6 PBPdelivered photos to Mr. Moy and billed Mr. Moy for the finalpayment of $200.

2/8 PBP paid$1000 to Good Co.

2/14 PBP provided photo servicesto Sweet Hearts Anonymous at the Valentines Day dance and received$250.

2/21 PBP was hired to takephotos at a sports banquet to be held on March 15th. Theprice was $1000 plus travel expenses with a down payment of$250.

2/22 PBP purchased photossupplies for $800 from Photo Chemical Company.

2/23 PBP paid $1500 to GoodCo.

2/25 PBP received a phonebill for $86

2/28 PBP paid $500 for amalpractice insurance policy for one year.

2/28 PBP sold additionalphotos taken at the Valentines Day Dance for $450

3/1 PBP paid a$100 deposit to rent a booth at the county fair to be held inJune.

3/3 PBP receivedpayment from Mr. Moy

3/8 PBP paid thephone bill.

3/15 PBP took photos at thesports banquet and billed the customer for the balance. The travelexpenses paid by PBP were $75.

3/19 PBP paid $500 to GoodCo.

3/22 PBP received a phonebill for $98

3/28 PBP received paymentfrom Sports Banquet

3/31 PBP landed a $5000contract to photograph the youth baseball club in April. BPBreceived a down payment of $2000

4/3 PBP paid thephone bill

4/5 PBPpurchased a $9000 photographic copy machine from Good Company onaccount. The useful life is 6 years.

4/12 BPB photographed ½ ofthe baseball club events scheduled for April and billed YBC for$500.

4/21 BPB received a phonebill for $84

4/29 BPB paid $287 for autorepairs that occurred while photographing the remainder of theevents for YBC. BPB billed YBC for $2500 for the workperformed.

5/3 BPB paid thephone bill

5/8 BPB receivedpayment in full from YBC

5/15 BPB paid $1200 to GoodCo.

5/18 BPB obtained permissionto photograph the Nicetown Highschool graduation on May28th.

5/20 BPB purchased $2500 ofPhoto supplies

5/28 BPB photographed thegraduation and received prepaid orders for $3600 of photos.

5/29 BPB received a phonebill for $108

5/31 BPB delivered $1200 ofthe graduation photos.

6/3 BPB paid thephone bill

6/8 BPB paid$1000 to Good Co.

6/15 BPB participated in theCounty Fair with the following results:

Received prepaid orders of $5000 for photos to be delivered bythe July 15th.

Sold prints of prior photos for $1400.

Paid $1500 for the rental of the booth.

Paid $491 for travel expenses.

6/21 BPB delivered theremainder of the graduation photos.

6/27 BPB received a phonebill for $211

6/28 BPB delivered $1800 ofthe photos for the County Fair.

Monica also has a shoebox of gas receipts that totals $782 forher business trips during the 6 months.

Monica has done an inventory count andhas $118 of supplies left in the closet on June 30.

Given the journal entries above, makethe neccessary adjusted journal entries.

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Nestor Rutherford
Nestor RutherfordLv2
28 Sep 2019

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DIRECTIONS:

A) Prepare journal entries for the following items

B) Post the journal entries into t-accounts or three-column form of account (starting balances would be those amounts per the post-closing trial balance)

C) Prepare an Income Statement for the month ended January 31,2017

D) Prepare a Statement of Retained Earnings for the month ended January 31, 2017

E) Prepare a Balance Sheet for January 31, 2017

The following transactions occurred during 2017 (the company uses a perpetual inventory system with FIFO):

1) Jan 4 Stockholders invested an additional $10,000 cash in the business in exchange for common stock

2) Jan 4 Purchased 20 turkeys at $50 each on account from Turkey Farms.

3) Jan 4 Established a $200 petty change fund

4) Jan 5 Sold 6 turkeys for $200 each to Mr. Pilgrim, terms 2/10, n/30.

5) Jan 6 Sold 12 turkeys at $200 each for cash

6) Jan 8 Paid wages of $240

7) Jan 9 Mr. Pilgrim returned one turkey because they originally ordered only 5.

8) Jan 12 Purchased equipment on account for $2,000

9) Jan 14 Received payment in full from Mr. Pilgrim

10) Jan 15 Purchased 10 turkeys at $52 each on account from Thanksgiving Industries, terms 1/10, n/30.

11) Jan 15 Paid utility bill of $120

12) Jan 16 Returned 2 turkeys to Thanksgiving Industries because they were defective.

13) Jan 17 Sold 8 turkeys for $245 each for cash

14) Jan 18 Paid tax bill from 2016.

15) Jan 18 Performed the service of turkey grooming ($800 worth); we received the cash in 2016

16) Jan 19 Paid Accounts Payable in full from 2016

17) Jan 20 Received $2,200 cash from customers paying on their accounts

18) Jan 21 Received a bill from the local radio station for advertising in the amount of $400

19) Jan 22 Purchased 20 turkeys for $55 each on account from Stuffing & Cranberry Company; terms 2/5, n/30

20) Jan 23 Sold 10 turkeys to Turkey Leg Corporation for $260 each on account; terms 3/10, n/30

21) Jan 25 Paid freight costs from Stuffing & Cranberry Company of $10.

22) Jan 26 Received payment in full from Turkey Leg Corporation

23) Jan 27 Sold 10 turkeys to customers on credit for $260 each.

24) Jan 28 Paid Stuffing & Cranberry Company for the

purchase on Jan 22

25) Jan 29 Petty cash was replenished and had the following receipts: gas receipt for $20, postage stamps for $39, Office Depot receipt for $16, miscellaneous receipt for $30, travel receipts for $40

26) Jan 30 Performed a physical inventory count and counted

only 1 turkey on hand.

27) Jan 30 Bank statement arrives today and there is a $20 bank service charge as well as a $120 NSF check.

28) Jan 31 One month’s prepaid insurance needs to be expensed for January ($1,200 is for the whole year)

29) Jan 31 Depreciate one month’s worth of the building and equipment (Using straight line method; building

has a useful life of 20 years, equipment has a useful life of 5 years and no salvage value)

30) Jan 31 The estimated bad debt expense under the percentage of sales basis is $120.

31) Jan 31 Paid dividends of $500

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. The December 31 inventory count of computer supplies shows $580 still available. Three months have expired since the 12-month insurance premium was paid in advance. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. Three of the four months' prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger. 3. Prepare an adjusted trial balance as of December 31, 2019. 4. Prepare an income statement for the three months ended December 31, 2019. 5. Prepare a statement of retained earnings for the three months ended December 31, 2019. 6. Prepare a balance sheet as of December 31, 2019. 7. Record and post the necessary closing entries as of December 31, 2019. 8. Prepare a post-closing trial balance as of December 31, 2019.

 

After the success of the company’s first two months, Santana Reycontinues to operate Business Solutions. (Transactions for thefirst two months are described in the serial problem of Chapter 2.)The November 30, 2015, unadjusted trial balance of BusinessSolutions (reflecting its transactions for October and November of2015) 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

236

Unearned computer services revenue

0

301

S. Rey, Capital

73,000

302

S. Rey, Withdrawals

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 inDecember 2015.

Dec.

2

Paid $1,025 cash to Hillside Mall for Business Solutions’ shareof 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 thereceivable from November.

10

Paid cash to Lyn Addie for six days of work at the rate of $125per day.

14

Notified by Alex’s Engineering Co. that Business Solutions’ bidof $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 HarrisOffice Products.

16

Sent a reminder to Gomez Co. to pay the fee for servicesrecorded on November 8.

20

Completed a project for Liu Corporation and received $5,625cash.

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

S. Rey withdrew $1,500 cash from the company for personaluse.

The following additional facts are collected for use in makingadjusting entries prior to preparing financial statements for thecompany’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 insurancepremium was paid in advance.

C. As of December 31, Lyn Addie has not been paid for four daysof work at $125 per day.

D. The computer system, acquired on October 1, is expected tohave a four-year life with no salvage value.

E. The office equipment, acquired on October 1, is expected tohave a five-year life with no salvage value.

F. Three of the four months’ prepaid rent has expired.

Please complete the following:

Prepare journal entries to record each of the Decembertransactions and events for Business Solutions.Post those entriesto the accounts in the ledger.

Prepare adjusting entries to reflect a through f. Post thoseentries to the accounts in the ledger.

Prepare an adjusted trial balance as of December 31, 2015.

Prepare an income statement for the three months ended December31, 2015.

Prepare a statement of owner’s equity for the three months endedDecember 31, 2015.

Prepare a balance sheet as of December 31, 2015.

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