Question

Aracel Engineering completed the following transactions in the month of June. a. Jenna Aracel, the owner, invested $175,000 cash, office equipment with a value of $8,100, and $63,000 of drafting equipment to launch the company in exchange for common stock b. The company purchased land worth $58,000 for an office by paying $8,800 cash and signing a long-term note payable for c. The company purchased a portable building with $56,000 cash and moved it onto the land acquired in b. d. The company paid $2,200 cash for the premium on an 18-month insurance policy e. The company completed and delivered a set of plans for a client and collected $9,700 cash. f. The company purchased $34,000 of additional drafting equipment by paying $11.200 cash and signing a long-term note payable for $22,800 9. The company completed $19,000 of engineering services for a client. This amount is to be received in 30 days. h. The company purchased $1,500 of additional office equipment on credit 1. The company completed engineering services for $21,000 on credit J. The company received a bill for rent of equipment that was used on a recently completed job. The $1467 rent cost must be pold k. The company collected $6,000 cash in partial payment from the client described in transactions 1. The company paid $1,300 cash for wages to a drafting assistant m. The company paid $1,500 cash to settle the account payable created in transaction n. The company paid $1,005 cash for minor maintenance of its drafting equipment o. The company paid $10.770 cash in dividends p. The company paid $1,300 cash for wages to a drafting assistant 9. The company paid $3.300 cash for advertisements on the Web during June Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101): Accounts Receivable (106): Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170X Cand (172): Accounts Payable (201): Notes Payable (250: Common Stock (307); Dividends (319); Engineering Fees Eamed (402): Wages Expense (601): Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). 2. Post the journal entries from part 1 to the ledger accounts 3. Prepare a trial balance as of the end of June.

Answer 1

No	Accounts name and explanation	Debit	Credit
a.	Cash	175000
	Office equipment	8100
	Drafting equipment	63000
	Common stock		246100
b.	Land	58000
	Cash		8800
	Notes payable		49200
c.	Building	56000
	Cash		56000
d.	Prepaid insurance	2200
	Cash		2200
e.	Cash	9700
	Engineering fees earned		9700
f.	Drafting equipment	34000
	Cash		11200
	notes payable		22800
g.	Accounts receivable	19000
	Engineering fees earned		19000
h.	Office equipment	1500
	Accounts payable		1500
i	Accounts receivable	21000
	Engineering fees earned		21000
j.	Rent expense	1467
	Accounts payable		1467
k.	Cash	6000
	Accounts receivable		6000
l.	Wages expense	1300
	Cash		1300
m.	Accounts payable	1500
	Cash		1500
n.	Repair expense	1005
	Cash		1005
o	Dividends	10770
	Cash		10770
p.	Wages expense	1300
	Cash		1300
q.	Advertising expense	3300
	Cash		3300

Aracel engineering
Trial balance
account title	Debit	Credit
Cash	93,325
Accounts receivable	34,000
Prepaid insurance	2,200
Office equipment	9600
Drafting equipment	97,000
Building	58,000
Land	56,000
Accounts payable		1,467
notes payable		72,000
common stock		246,100
Dividends	10,770
engineering fees earned		49,700
wages expenses	2,600
equipment rental expense	1,467
Advertising expense	3300
Repairs expense	1005
Total	369,267	369,267