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Santana Rey created Business Solutions on October 1, 2019

Accounting

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Santana Rey created Business Solutions on October 1, 2019. The company has been successful. and its list of customers has grown. To accommodate the growth, the accounting system is modi?ed to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts. No. Account Title Debit Credit 191 Cash 543,552 196.1 Alex's Engineering Co. 9 196.2 wildcat Services 9 196.3 Easy Leasing 9 196.4 IFl-l CI). 3,999 196.5 Liu Corp. 9 196.6 Gomez Co. 2,?69 196.? Delta Co. 9 196.8 KC, Inc. 9 196.9 Dream, Inc. 9 119 Merchandise inventory 9 126 Computer supplies ?39 129 Prepaid insurance 1,92? 131 Prepaid rent 925 163 Office equipment 3.999 164 Accumulated depreciation-Office equipment $ 329 16? Computer equipment 21,599 169 Accumulated depreciation-Computer equipment 1,119 291 Accounts payable 1,299 219 Wages payable 949 236 Unearned computer services revenue 1,359 391 S. Rey, Capital 82,462 392 S. Rey, Withdrawals 9 493 Computer services revenue 9 413 Sales 9 414 Sales returns and allowances 415 Sales discounts 592 Cost of goods sold 612 Depreciation expense—Office equipment 613 Depreciation expense—Computer equipment 623 Wages expense 63? Insurance expense 649 Rent expense 652 Computer supplies expense 655 Advertising expense 6?6 Mileage expense 6?? Miscellaneous expenses 634 Repairs expense—Computer

In response to requests from customers, 5. Rey will begin selling computer software. The company will extend credit terms of 1.30, n80. FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts {Nos. 119, 413, 414, 415, and 502} are added to its general ledger to accommodate the company‘s new merchandising activities. Its transactions for January through March follow: Jan. 4 13 15 16 1? 23 22 24 26 26 Feb. u w H H 11 15 23 26 2? Mar. 3 11 16 19 The company paid cash to Lyn Addie for five days' work at the rate of $235 per day. Four of the five days relate to wages payable that were accrued in the prior year. Santana Rey invested an additional $23,233 cash in the company. The company purchased $3,333 of merchandise from Kansas Corp. with terms of 1i13, ni33, FOB shipping point, invoice dated January 2. The company received $2,363 cash from Gomez Co. as full payment on its account. The company completed a five—day project for Alex's Engineering Co. and billed it $5,533, which is the total price of $6,853 less the advance payment of $1,353. The company debited Unearned Computer Services Revenue for $1,353. The company sold merchandise with a retail value of $4,933 and a cost of $3,453 to Liu Corp., invoice dated January 13. The company paid $293 cash for freight charges on the merchandise purchased on January 3. The company received $4,133 cash from Delta Co. for computer services provided. The company paid Kansas Corp. for the invoice dated January 2, net of the discount. The company gave a price reduction {allowance} of $633 to Liu Corp., and credited Liu's accounts receivable for that amount. The company received the balance due from Liu Corp., net of the discount and the allowance. The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases [debited accounts payable). The defective merchandise invoice cost, net of the discount, was $435. The company purchased $9,233 of merchandise from Kansas Corp. with terms of 1i13, ni33, FOB destination, invoice dated January 25. The company sold merchandise with a $4,493 cost for $5,953 on credit to KC, Inc., invoice dated January 26. The company paid cash to Lyn Addie for 13 days' work at $235 per day. The company paid $2,225 cash to Hillside Hall for another three months' rent in advance. The company paid Kansas Corp. for the balance due, net of the cash discount, less the $436 credit from merchandise returned on January 24. The company paid $433 cash to Facebook for an advertisement to appear on February 5 only. The company received the balance due from Alex's Engineering Co. for fees billed on January 11. Santana Rey withdrew $4,333 cash from the company for personal use. The company sold merchandise with a $2,593 cost for $3,263 on credit to Delta Co., invoice dated February 23. The company paid cash to Lyn Addie for eight days' work at $235 per day. The company reimbursed Santana Rey $192 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense." The company purchased $2,233 of computer supplies from Harris Office Products on credit with terms of ni33, FDB destination, invoice dated March 3. The company received the balance due from Delta Co. for merchandise sold on February 23. The company paid $333 cash for minor repairs to the company's computer. The company received $5,333 cash from Dream, Inc., for computing services provided. The comoanv oaid the full amount due of $3.983 to Harris Office Products. consistino of amounts

created on December 15 {of $1.238] and March 8. 24 The company billed Easy Leasing for $9.11?r of computing services provided. 25 The company sold merchandise with a $2.132 cost for $2.566 on credit to Wildcat Services. invoice dated March 25. 31! The company sold merchandise with a $1.163 cost for $2.3“! on credit to IFM Company. invoice dated March 30. 31 The company reimbursed Santana Rey $96 for business automobile mileage. The company recorded the reimbursement as "Mileage Expense.’I The following additional facts are available for preparing adjustments on March 31 prior to ?nancial statement preparation: a. The March 31 amount of computer supplies still available totals $2,205. b. Prepaid Insurance coverage of $609 expired during this 3-month period. c. Lyn Addie has not been paid for seven days of work at the rate of $235 per day. d. Prepaid rent of $2,775 expired during this 3-month period. e. Depreciation on the computer equipment for January 1 through March 31 is $1,110. f. Depreciation on the of?ce equipment for January1 through March 31 is $320. 9. The March 31 amount of merchandise inventory still available totals $584. 2. Post the journal entries in part 1 to the accounts in the company‘s general ledger. Note: Begin with the ledger's post-closing adjusted balances as of December 31, 2019. [Record the transectlons In the order presented. Do not skip rows.) 01 to i— —_ __ —m —_ __ _m __ __ __ -—

106.2 Accounts Receivable-Wildcat Services 106.3 Accounts Receivable-Easy Leasing Date Debit Credit Balance Date Debit Credit Balance Dec. 31 0 Dec. 31 0 106.4 Accounts Receivable-IFM Co. 106.5 Accounts Receivable-Liu Corporation Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 0 106.6 Accounts Receivable-Gomez Co. 106.7 Accounts Receivable-Delta Co. Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 0 106.8 Accounts Receivable-KC, Inc. 106.9 Accounts Receivable-Dream, Inc. Date Debit Credit Balance Date Debit Credit Balance Dec. 31 0 Dec. 31 119 Merchandise Inventory 126 Computer Supplies Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31

119 Merchandise Inventory 126 Computer Supplies Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 128 Prepaid Insurance 131 Prepaid Rent Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 163 Office Equipment 164 Accumulated Depreciation-Office Equipment Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31

128 Prepaid Insurance 131 Prepaid Rent Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 163 Office Equipment 164 Accumulated Depreciation-Office Equipment Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 167 Computer Equipment 168 Accumulated Depreciation-Computer Equipment Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 201 Accounts Payable 210 Wages Payable Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31

236 Unearned Computer Services Revenue 301 S. Rey, Capital Date Debit Credit Balance Date Debit Credit Balance Dec. 31 Dec. 31 302 S. Rey, Withdrawals 403 Computer Services Revenue Date Debit Credit Balance Date Debit Credit Balance 413 Sales 414 Sales Returns and Allowances Date Debit Credit Balance Date Debit Credit Balance 415 Sales Discounts 502 Cost of Goods Sold Date Debit Credit Balance Date Debit Credit Balance

612 Depreciation Expense-Office Equipment 613 Depreciation Expense-Computer Equipment Date Debit Credit Balance Date Debit Credit Balance 623 Wages Expense 637 Insurance Expense Date Debit Credit Balance Date Debit Credit Balance 640 Rent Expense 652 Computer Supplies Expense Date Debit Credit Balance Date Debit Credit Balance 655 Advertising Expense 676 Mileage Expense Date Debit Credit Balance Date Debit Credit Balance 677 Miscellaneous Expenses 684 Repairs Expense-Computer Date Debit Credit Balance Date Debit Credit Balance

No Date General Journal Debit Credit 1 Jan 04 Wages payable 940 Wages expense 235 Cash 1, 175 2 Jan 05 Cash 23,200 S. Rey, Capital 23,200 3 Jan 07 Merchandise inventory 6,000 Accounts payable 6,000 4 Jan 09 Cash 2,768 Accounts receivable-Gomez Co. 2,768 5 Jan 11 Unearned computer services revenue 1,350 Accounts receivable-Alex's Engineering Co. 5,500 Computer services revenue 6,850 6 Jan 13 Accounts receivable-Liu Corp. 4,900 Sales 4,900 7 Jan 13 Cost of goods sold 3,450 Merchandise inventory 3,450 8 Jan 15 Merchandise inventory 790 Cash 790 Jan 16 Cash 4,130 Computer services revenue 4, 130 10 Jan 17 Accounts payable 6,000 Merchandise inventory 60

Merchandise inventory 60 Cash 5,940 11 Jan 20 Sales returns and allowances 600 Cash 600 12 Jan 22 Cash 4,257 Sales discounts 43 Accounts receivable-Liu Corp. 4,300 13 Jan 24 Accounts payable 486 Merchandise inventory 486 14 Jan 26 Merchandise inventory 9,200 Accounts payable 9,200 15 Jan 26 Accounts receivable-KC, Inc. 5,950 Sales 5,950 16 Jan 26 Cost of goods sold 4,490 Merchandise inventory 4,490 17 Jan 31 Wages expense 2,350 Cash 2,350 18 Feb 01 Prepaid rent 2,775 Cash 2,775 19 Feb 03 Accounts payable 8,714

19 Feb 03 Accounts payable 8,714 Merchandise inventory 92 Cash 8,622 20 Feb 05 Advertising expense 430 Cash 130 21 Feb 11 Cash 5,500 Accounts receivable-Alex's Engineering Co. 5,500 22 Feb 15 S. Rey, Withdrawals 4,680 Cash 4,680 23 Feb 23 Accounts receivable-Delta Co. 3,260 Sales 3,260 24 Feb 23 Cost of goods sold 2,590 Merchandise inventory 2,590 25 Feb 26 Wages expense 1,880 Cash 1,880 26 Feb 27 Mileage expense 192 Cash 192 27 Mar 08 Computer supplies 2,780 Accounts payable 2,780 28 Mar 09 Cash 3,260

28 Mar 09 Cash 3,260 Computer services revenue 3,260 29 Mar 11 Repairs expense-Computer 780 Cash 780 30 Mar 16 Cash 5,330 Computer services revenue 5,330 31 Mar 19 Accounts payable 3,980 Cash 3,980 32 Mar 24 Accounts receivable-Easy Leasing 9, 117 Computer services revenue 9.117 33 Mar 25 Accounts receivable-Wildcat Services 2,960 Sales 2,960 34 Mar 25 Cost of goods sold 2, 132 Merchandise inventory 2,132 35 Mar 30 Accounts receivable-IFM Co. 2,370 Sales 2,370 36 Mar 30 Cost of goods sold 1, 108 Merchandise inventory 1, 108 37 Mar 31 Mileage expense 96 Cash 96