Chapter 2, Problem 2PSA

Problem 2-2A Preparing and posting journal entries; preparing a trial balance C3 C4 A1 P1

P2

Aracle Engineering completed the following transactions in the month of June.

a. Jena Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000.

and $60,000 of drafting equipment to launch the company in exchange for common stock.

b. The company purchased land worth $49,000 for an office by paying $6,300cash and

signing a long-term note payable for $42,700.

c. The company purchased a portable building with $55,000 cash and moved it onto the land

acquired in b.

d. The company paid $3,000 cash for the premium on an 18-month insurance policy.

e. The company completed on delivered a set of plans for a client and collected $6,200 cash.

f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash

and signing a long-term note payable for $10,500.

g. The company completed $14,000 of engineering services for a client. This amount is to be

received in 30 days.

h. The company purchased $1,150 of additional office equipment on credit.

i. The company completed engineering services for $22,000 on credit.

j. The company received a bill for rent of equipment that was used on a recently completed

job. The $1,333 rent cost must be paid within 30 days.

k. The company completed $7,000 cash is partial payment from the client described in

transaction g.

l. The company paid $1,200cash for wages to a drafting assistant.

m. The company paid $1,150 cash to settle the account payable credit in transaction h.

n. The company paid $925 cash for minor maintenance of its drafting equipment.

o. The company paid $9480 cash in dividends.

p. The company paid$1,200 cash for wages to drafting assistant.

q. The company paid $2,500cash for advertisements on the web during June.

Required

1. Prepare general journal entries to record these transactions (use the account titles listed in

part 2).

2. Open the following ledger accounts—their account numbers are in parentheses (use the

balance column format): Cash (101): Accounts Receivable(106): Prepared insurance (108):

office Equipment (163): Drafting Equipment (164): Building (170): Land (172): Accounts

Payable (201): Notes Payable (250): Common stock (307): Dividends (319):Engineering

Fees Earned (402): Wages Expense (601); Equipment Rental Expense (602); Advertising

Expense (603): and Repair Expense (604). Post the journal entries from part 1to the

accounts and enter the balance after each posting.

Check (2 )Ending balances : Cash. $22,945; Accounts Receivable,$29,000;Accounts

payable.$1,333

3. Prepare a trial balance as of the end of June.

(3)Trial balance totals, $261,733