Professional Documents
Culture Documents
Shania Shelton, the owner, invested $105,000 cash, office equipment with a value of $6,000, and $45,000 of drafting equipment to launch the business. b. Purchased land worth $54,000 for an office by paying $5,400 cash and signing a long-term note payable for $48,600. c. Purchased a portable building with $75,000 cash and moved it onto the land acquired in b. d. Paid $6,000 cash for the premium on an 18-month insurance policy. e. Completed and delivered a set of plans for a client and collected $5,700 cash. f. Purchased $22,500 of additional drafting equipment by paying $10,500 cash and signing a longterm note payable for $12,000. g. Completed $12,000 of engineering services for a client. This amount is to be received in 30 days. h. Purchased $2,250 of additional office equipment on credit. i. Completed engineering services for $18,000 on credit. j. Received a bill for rent of equipment that was used on a recently completed job. The $1,200 rent must be paid within 30 days. k. Collected $7,200 cash in partial payment from the client described in transaction g. l. Paid $1,500 cash for wages to a drafting assistant. m. Paid $2,250 cash to settle the account payable created in transaction h. n. Paid $675 cash for minor repairs to the drafting equipment. o. Shelton withdrew $9,360 cash for personal use. p. Paid $1,500 cash for wages to a drafting assistant. q. Paid $3,000 cash for advertisements in the local newspaper during June. 1. Prepare general journal entries to record these transactions (use the account titles listed in part 2). 2. Open the following accountstheir account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163);
Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); S. Shelton, Capital (301); S. Shelton, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting. 3. Prepare a trial balance as of the end of this months operations.
Cash
163 164
b.
Land
48,600
c.
Building
Purchased building.
170
d.
108 6,000
6,000
e.
Cash
402
5,700
f.
22,500 12,000
g.
12,000 402
12,000
h.
2,250 2,250
i.
18,000 402
18,000
j.
602
1,200 1,200
k.
Cash
106
7,200
Cash 101
Paid amount due on account.
2,250
Cash
repair of equipment.
101 675
Paid for
o. S. Shelton, Withdrawals
9,360
101 1,500
101
Part 2
Cash Date PR (a) (b) (c) (d) (e) (f) (k) (l) (m) (n) (o) (p) (q) 7,200 1,500 2,250 675 9,360 1,500 3,000 5,700 10,500 Debit 105,000 5,400 75,000 6,000 Credit No. 101 Balance 105,000 99,600 24,600 18,600 24,300 13,800 21,000 19,500 17,250 16,575 7,215 5,715 2,715 S. Shelton, Capital Date PR (a) Debit Credit 156,000 No. 301 Balance 156,000 Notes Payable Date PR (b) (f) Debit Credit 48,600 12,000 No. 250 Balance 48,600 60,600 Accounts Payable Date PR (h) (j) (m) 2,250 Debit Credit 2,250 1,200 No. 201 Balance 2,250 3,450 1,200
Accounts Receivable Date PR (g) (i) (k) Debit 12,000 18,000 7,200 Credit
Part 3
SHELTON ENGINEERING
Trial Balance June 30 Debit Cash $ 2,715 Accounts receivable 22,800 Prepaid insurance 6,000 Office equipment 8,250 Drafting equipment 67,500 Building 75,000 Land 54,000 Accounts payable $ Notes payable 60,600 S. Shelton, Capital 156,000 S. Shelton, Withdrawals Engineering fees earned 35,700 Wages expense 3,000 Equipment rental expense 1,200 Advertising expense 3,000 Repairs expense 675 Totals $253,500 $253,500 9,360 1,200 Credit