On October 1, 2011, Santana Rey launched a computer services company called Busi

Question

On October 1, 2011, 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, 2011. The company's initial chart of accounts follows.

Oct. 1 S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock.
2 The company paid $3,300 cash for four months' rent. (Hint: Debit Prepaid Rent for $3,300.)
3 The company purchased $1,420 of computer supplies on credit from Harris Office Products.
5 The company paid $2,220 cash for one year's premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,220.)
6 The company billed Easy Leasing $4,800 for services performed in installing a new Web server.
8 The company paid $1,420 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 $1,400 for services performed.
15 The company received $4,800 cash from Easy Leasing as partial payment on its account.
17 The company paid $805 cash to repair computer equipment that was damaged when moving it.
20 The company paid $1,728 cash for advertisements published in the local newspaper.
22 The company received $1,400 cash from Easy Leasing on its account.
28 The company billed IFM Company $5,208 for services performed.
31 The company paid $875 cash for Lyn Addie's wages for seven days' work.
31 The company paid $3,600 cash for dividends.
Nov. 1 The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.32 per mile).
2 The company received $4,633 cash from Liu Corporation for computer services performed.
5 The company purchased computer supplies for $1,125 cash from Harris Office Products.
8 The company billed Gomez Co. $5,668 for services performed.
13 The company received notification from Alex's Engineering Co. that Business Solutions' bid of $3,950 for an upcoming project is accepted.
18 The company received $2,208 cash from IFM Company as partial payment of the October 28 bill.
22 The company donated $250 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 $3,950.
25 The company sent another bill to IFM Company for the past-due amount of $3,000.
28 The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.32 per mile).
30 The company paid $1,750 cash for Lyn Addie's wages for 14 days' work.
30 The company paid $2,000 cash for dividends.

Required:
1.
Prepare journal entries to record each of the above transactions for Business Solutions. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)


2.
Prepare a ledger accounts (in balance column format) and post the journal entries from required 1 to them. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)



3.
Prepare a trial balance as of the end of November. (Be sure to list assets in the order of their liquidity. The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Revenues, and Expenses. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Explanation / Answer

In addition to making their products and services valuable and attractive to customers, small business owners must also work at sales, marketing, networking and managing. Yet all of these elements do not guarantee business success. The key ingredient that determines whether an owner will be able to start a business and run it in a profitable manner is the ability to make informed financial decisions in an accurate, timely fashion. Most owners do not have the extensive training and knowledge to make these decisions, nor have the budget or need for an in-house accounting department. Small to medium business owners must ask themselves if they have the time to: Maintain accounting records after working 10-15 hour days. Set up, select and computerize an accounting system. Deal with filing and processing payroll. Reconcile bank accounts and actively monitor cash balances. Possess the expertise to code expenses, assets and other income to provide a CPA with information to prepare tax returns at year end. Prepare financial information to monitor trends, profitability, cash balance and accounts receivable. Hire and train a bookkeeper to run the financial aspects of the business. A “No” answer to any of these questions indicates that the business may derive significant benefit from outsourcing their accounting functio

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