After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (Reflecting its transactions for October and November of 2015) 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
307 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 705
677 Miscellaneous expense 250
684 Repairs expense - computer 805
Totals $98659 $98659
Business Solutions has the following transactions and events in December 2020:
Dec:
2. Paid $1,025 cash to Hillside Mall for Business Solutions share of mall advertising costs.
3. Paid $500 cash for mirror 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 47,000 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 in cash.
22-26. Took the week off for holidays.
26. Received $3,000 cash from Gomez Co on its receivable
29. Reimbursed S. Re for business automobile mileage (600 miles at $0.32per 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.
a. The December 31 inventory count of computer supplies shos $580 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 $125 per day.
d. The computer system acquired on October 1 is expected to have a four-year life with no salvage value.
e. The office equipment acquired on October 1, is expected to have a five-year life with no salvage value.
f. Three of the four months' prepaid rent has expired.
Required
Prepare a balance sheet as of December 31, 2020. Record and post the necessary closing entries for Business Solutions Prepare a post-closing trial balance as of December 31, 2020.
