Months Date Transaction Debit

Oct 1 Cash 45000

Computer equipment 20000
Office Equipment 8000
Contributed capital
Oct 2 Prepaid Rent 3300
Cash
Oct 3 Computer Supplies 1420
Account payable
Oct 5 Prepaid Insurance 2220
Cash
Oct 6 Accounts receivable 4800
Computer services revenue
Oct 8 Accounts payable 1420
Cash
Oct 10 No journal entry required

Oct 12 Accounts receivable 1400

Computer services revenue
Oct 15 Cash 4800
Accounts Receivable
Oct 17 Repairs expense - Computer 805
Cash
Oct 20 Advertising expense 1728
Cash
Oct 22 Cash 1400
Accounts receivable
Oct 28 Accounts receivable 5208
Computer services revenue
Oct 31 Wages expense 875
Cash
Oct 31 S.Rey withdrawals 3600
Cash

Nov 1 Mileage expense 320

Cash
Nov 2 Cash 4633
 Computer services revenue
Nov 5 Computer supplies 1125
Cash
Nov 8 Accounts receivable 5668
Computer services revenue
Nov 13 No journal entry required

Nov 18 Cash 2208

Accounts receivable
Nov 22 Donation expenses 250
Cash
Nov 24 Accounts receivable 3950
Conputer services revenue
Nov 25 No journal entry required
Nov 28 Mileage expense 384
Cash
Nov 30 Wages expense 1750
Cash
Nov 30 S.Rey Withdrawal 2000
Cash

Dec 2 Advertising expense 1025

Cash
Dec 3 Repairs expense - computer 500
Cash
Dec 4 Cash 3950
Account receivable
Dec 10 Wages expense 750
Cash
Dec 14 Cash 1500
Unearned computer services revenue
Dec 15 Computer supplies 1100
Accounts payable
Dec 16 No journal entry required

Dec 20 Cash 5625

Computer services revenue
Dec 28 Cash 3000
Accounts receivable
Dec 29 Mileage expense 192
Cash
Dec 31 S.Rey Withdrawal 1500
Cash
ADJUSTING ENTRIES
a Computer supplies expense 3065
Computer supplies
b Insurance expense 555
Prepaid insurance
c Wages expense 500
Wages payable
d Depreciation expense - computer equipment 1250
Accumulated depreciation - computer equipment
e Depreciation expense - office equipment 400
Accumulated depreciation - Office equipment
f Rent expense 2475
Prepaid rent

CLOSING ENTRIES

Dec 31 Computer services revenue 31,284

Income summary

Dec 31 Income summary 16,824

Depreciation expense—Office equipment
Depreciation expense—Computer equipment
Wages expense
Insurance expense
Rent expense
Computer supplies expense
Advertising expense
Mileage expense
Miscellaneous expenses
Repairs expense—Computer
Dec 31 Income summary 14,460
Retained earnings

Dec 31 Retained earnings 7,100

Withdraw
Credit Assets Liabilities Equilty
Month Date Cash Month Date Account payable Month Date
Debit Credit Debit Credit
Oct 1 45000 Oct 3 1420 Oct 1
73000 Oct 2 3300 Oct 8 1420 Balance
Oct 5 2220 Dec 1
3300 Oct 8 1420 Dec 15 1100
Oct 15 4800 Balance 1100 Oct 31
1420 Oct 17 805 Unearned revenue Nov 30
Oct 20 1728 Debit Credit Dec 31
2220 Oct 22 1400 Dec 12 1500 Dec 31
Oct 31 875 Balance
4800 Oct 31 3600
Nov 1 320 Balance 1500
1420 Nov 2 4633 Wages Payable Oct 6
Nov 5 1125 Debit Credit Oct 12
Nov 18 2208 Dec 31 500 Oct 28
Nov 22 250 Nov 2
1400 Nov 28 384 Balance 500 Nov 8
Nov 30 1750 Nov 24
4800 Nov 30 2000 Dec 31
Dec 31
805 Dec 2 1025
Dec 3 500 Balance
1728 Dec 4 3950
Dec 10 750
1400 Dec 14 1500
Dec 20 5625 Oct 31
5208 Dec 28 3000 Nov 30
Dec 29 192 Dec 31
875 Dec 31 1500 Dec 31
Dec 31
3600 Balance 48372
Account receivable
Debit Credit
320 Oct 6 4800
Oct 12 1400
4633 Oct 15 4800 Balance
Oct 22 1400
1125 Oct 28 5208
Nov 8 5668 Oct 20
5668 Nov 18 2208 Dec 2
Nov 24 3950 Dec 31
Dec 24 3950 Balance
Dec 28 3000
2208

250 Nov 1
Nov 28
3950 Dec 29
Balance 5668 Dec 31
Computer supplies Balance
384
Debit Credit
1750 Oct 3 1420 Nov 22
Nov 5 1125 Dec 31
2000 Dec 15 1100
Dec 15 3065 Balance
Balance 580
1025 Prepaid Insurance
Debit Credit
500 Oct 5 2220
Dec 31 555 Oct 17
3950 Balance 1665 Dec 3
Prepaid rent Dec 31
750 Debit Credit Balance
Oct 2 3300
1500 Dec 31 2475
Balance 825 Dec 31
1100 Office equipment Dec 31
Debit Credit Balance
Oct 1 8000

5625 Balance 8000 Dec 10

 Computer equipment Dec 31
3000 Debit Credit Balance
Oct 1 20000
192
Balance 20000 Dec 31
1500 Accumulated Depreciation - Computer equipment Dec 31
Debit Credit Dec 31
Dec 31 400 Balance
3065
Balance 400
555 Accumulated Depreciation - Office equipment Dec 31
Debit Credit Dec 31
500 Dec 31 1250 Dec 31
Balance
1250 Balance 1250

400

2475

31,284

400
1,250
3,875
555
2,475
3,065
2,753
896
250
1,305
14,460

7,100
 Equilty
Onwer's capital
Debit Credit
73000
73000
Onwer's withdraws
Debit Credit
3600
2000
1500
7100
0
Computer services Revenue
Debit Credit
4800
1400
5208
4633
5668
3950
5625
31284

Wages expenses
Debit Credit
875
1750
750
500
3875
 0
Ad expenses
Debit Credit
1728
1025
2753
0
Millage expenses

Debit Credit
320
384
192
896
0
Donation expenses
Debit Credit
250
250

0
Repair expenses

Debit Credit
805
500
1305
0
Depreciation expense - Computer equipment
Debit Credit
1250
1250
0
Depreciation expense - Office equipment
Debit Credit
400
 400
0
Retained Earnings
Debit Credit
14460
7100

7360
Income Summary
Debit Credit
31284
16824
14460
0
 UNADJUSTED TRIAL BALANCE ADJUSTMENT
Debit Credit Debit Credit
Cash 38264 10108
Accounts receivable 12618 6950
Computer supplies 2545 1965
Prepaid insurance 2220 555
Prepaid rent 3300 2475
Accumulated depreciation—
Office equipment 8000
Office equipment 0 400
Accumulated depreciation—
Computer equipment 20000
Unearned
Computer computer
equipmentservices 0 1250
revenue 0 1500
Accounts payable 0 1100
Wages payable 0 500
S.Rey, Capital 73000 0
S.Rey, Withdrawals 5600 1500
Depreciation expense—Office
Computer services revenue 25659 5625
equipment 0 400
Depreciation expense—
Computer supplies expenses 0 3065
Computer equipment 0 1250
Wages expense 2625 1250
Insurance expense 0 555
Rent expense 0 2475
Advertising expense 1728 1025
Mileage expense 704 192
Donation expense 250 0
Repairs expense—Computer 805 500
Totals 98659 98659 22320 22320
ADJUSTED TRIAL BALANCE
Debit Credit
48372
5668
580
1665
825
8000
400
20000
1250
1500
1100
500
73000
7100
31284
400
3065
1250
3875
555
2475
2753
896
250
1305
109034 109034
 BUSINESS SOLUTIONS
Adjusted Trial Balance
December 31,2011

Account title Debit Credit

Cash 48372
Accounts receivable 5668
Computer supplies 580
Prepaid insurance 1665
Prepaid rent 825
Office equipment
Accumulated depreciation— 8000
Office equipment 400
Computer equipment
Accumulated depreciation— 20000
Computer computer
Unearned equipmentservices 1250
revenue 1500
Accounts payable 1100
Wages payable 500
S.Rey, Capital 73000
S.Rey, Withdrawals 7100
Computer services
Depreciation revenue
expense—Office 31284
equipment 400
Computer supplies
Depreciation expenses
expense— 3065
Computer equipment 1250
Wages expense 3875
Insurance expense 555
Rent expense 2475
Advertising expense 2753
Mileage expense 896
Donation expense 250
Repairs expense—Computer 1305
109034 109034
 BUSINESS SOLUTIONS
Income Statement
For Three Months Ended December 31

Account Dr
Revenue:
Computer services revenue
Expenses:
Depreciation expense—Office equipment 400
Depreciation expense—Computer equipment 1,250
Wages expense 3,875
Insurance expense 555
Rent expense 2,475
Computer supplies expense 3,065
Advertising expense 2,753
Mileage expense 896
Miscellaneous expenses 250
Repairs expense—Computer 1,305
Total expenses
Net income

BUSINESS SOLUTIONS
Statement of Owner's Equity
For Three Months Ended December 31

S.Rey, Capital
Plus: Net income

Less:
S.Rey, Withdrawals
S.Rey, Ending Balance
 BUSINESS SOLUTIONS
31 Balance Sheet
December 31, 2015
Cr Assets
Cash 48,372
31,284 Accounts receivable 5,668
Computer supplies 580
Prepaid insurance 1,665
Prepaid rent 825
Office equipment
Accumulated depreciation—Office 8,000
equipment -400 7,600
Computer equipment
Accumulated depreciation—Computer 20,000
equipment -1,250 18,750
Total Assets 83,460
Liabilities
Accounts payable $1,100
Wages payable 500
16,824 Unearned computer services revenue 1,500
14,460 Total Liabilities 3,100
Equity
Common stock 73,000
Retained earnings 7,360
Total equity 80,360
Total Liabilities and Equity $83,460
31

73000
14460
87460

7100
80360
Debt-to-Assets Ratio = Total Debt / Total Assets = 3100/83460 = 0.037 = 3.7%

Profit Margin ratio = Net income / Net Sale = 14460/31284 = 0.462 = 46.2%
margin ratio shows what percentage of sales are left over after all expenses are paid by the
business.
This ratio also indirectly measures how well a company manages its expenses relative to its net
sales.
(both short-term debt and long-term debt) to the company's total assets. Total-debt-to-total-
assets is a measure of the company's assets that are financed by debt rather than equity.