After the success of its first two months Mary Graham

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After the success of its first two months, Mary Graham has decided to continue operating F.cho
Systems. (The transactions that occurred in these months are described in Chapter 2.) Before
proceeding in December, Graham adds these new accounts to the chart of accounts for the
ledger: Account NoAccumulated Depreciation, Office Equipment .............................
164Accumulated Depreciation, Computer Equipment ......................... 168Wages Payable
................................................................... 210Unearned Computer Services Revenue
...................................... 236Depreciation Expense, Office Equipment ...................................
612Depreciation Expense, Computer Equipment ............................... 613Insurance Expense
.............................................................. 637Rent Expense
.................................................................... 640Computer Supplies Expense
.................................................... 652Required1. Prepare journal entries to record each of the
following transactions for Echo Systems. Post the entries to the accounts in the ledger.Dec. 3
Paid $2,100 to the Lakeshore Mall for the company's share of mall advertising costs.3 Paid
$1,200 to repair the company's computer.4 Received $7,500 from Alamo Engineering Co. for
the receivable from the prior month.10 Paid Carly Smith for six days' work at the rate of $200
per day.14 Notified by Alamo Engineering Co. that Echo's bid of $12,000 on a proposed project
was accepted. Alamo paid an advance of $3,000.17 Purchased $2,310 of computer supplies on
credit from Abbott Office Products.18 Sent a reminder to Fostek Co. to pay the fee for services
originally recorded on November 8.20 Completed a project for Elite Corporation and received
$11,250 cash.24-28 Took the week off for the holidays.31 Received $5,700 from Fostek Co. on
its receivable.31 Reimbursed Mary Graham's business automobile expenses of 600 kilometres
at $1.00 perkilometre.31 Mary Graham withdrew $3,600 cash from the business.2. Prepare
adjusting entries to record the following additional information collected on December 31, 2014.
Post the entries to the accounts in the ledger.a. The December 31 inventory of computer
supplies was $1,440.b. Three months have passed since the annual insurance premium was
paid.c. As of the end of the year, Carly Smith has not been paid for four days of work at the rate
of $200 per day.d. The computer is expected to have a four-year life with no residual value.e.
The office equipment is expected to have a three-year life with no residual value.f. Prepaid rent
for three of the four months has expired.3. Prepare an adjusted trial balance as of December
31, 2014.4. Prepare an income statement and statement of changes in equity for the three
months ended December 31, 2014.5. Prepare a balance sheet as of December 31, 2014.View
Solution:
After the success of its first two months Mary Graham

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