Problem
On October 1, 2015, 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, 2015. The company's initial chart of accounts follows.
|
Account
|
No.
|
Account
|
No.
|
|
Cash
|
101
|
S. Rey, Capital
|
301
|
|
Accounts Receivable
|
106
|
S. Rey, Withdrawals
|
302
|
|
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 $47,000 cash, a $24,000 computer system, and $8,000 of office equipment in the company.
2 The company paid $3,280 cash for four months' rent. (Hint: Debit Prepaid Rent for $3,280.)
3 The company purchased $1,400 of computer supplies on credit from Harris Office Products.
5 The company paid $2,160 cash for one year's premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,160.)
6 The company billed Easy Leasing $4,900 for services performed in installing a new Web server.
8 The company paid $1,400 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 $2,000 for services performed.
15 The company received $4,900 cash from Easy Leasing as partial payment on its account.
17 The company paid $775 cash to repair computer equipment that was damaged when moving it.
20 The company paid $1,708 cash for advertisements published in the local newspaper.
22 The company received $2,000 cash from Easy Leasing on its account.
28 The company billed IFM Company $6,008 for services performed.
31 The company paid $875 cash for Lyn Addie's wages for seven days' work.
31 S. Rey withdrew $3,200 cash from the company for personal use.
Nov. 1 The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.22 per mile).
2 The company received $5,433 cash from Liu Corporation for computer services performed.
5 The company purchased computer supplies for $1,100 cash from Harris Office Products.
8 The company billed Gomez Co. $6,168 for services performed.
13 The company received notification from Alex's Engineering Co. that Business Solutions' bid of $4,050 for an upcoming project is accepted.
18 The company received $3,408 cash from IFM Company as partial payment of the October 28 bill.
22 The company donated $160 cash to the United Way in the company's name.
24 The company completed work for Alex's Engineering Co. and sent it a bill for $4,050.
25 The company sent another bill to IFM Company for the past-due amount of $2,600.
28 The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.22 per mile).
30 The company paid $1,750 cash for Lyn Addie's wages for 14 days' work.
30 S. Rey withdrew $2,000 cash from the company for personal use.
Required
1. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them.
2. Prepare a trial balance as of the end of November.