Shelton Engineering completed the following transactions in the month of June.? a.
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
101 105,000 Office Equipment Drafting Equipment
163 164
6,000 45,000 S. Shelton, Capital 301 156,000
Owner invested cash and equipment.
b.
Land
172 54,000 Cash 101 5,400 Note Payable 250
48,600
Purchased land with cash and note payable.
c.
Building
Purchased building.
170
75,000 Cash 75,000 101
d.
Prepaid Insurance Cash 101
108 6,000
6,000
Purchased 18-month insurance policy.
e.
Cash
101 5,700 Engineering Fees Earned
402
5,700
Collected cash for completed work.
f.
Drafting Equipment Cash 101 Note Payable
164 10,500 250
22,500 12,000
Purchased equipment with cash and note payable.
g.
Accounts Receivable 106 Engineering Fees Earned
Completed services for client.
12,000 402
12,000
h.
Office Equipment 163 Accounts Payable201
Purchased equipment on credit.
2,250 2,250
i.
Accounts Receivable 106 Engineering Fees Earned
Billed client for completed work.
18,000 402
18,000
j.
Equipment Rental Expense Accounts Payable201
602
1,200 1,200
Incurred equipment rental expense.
k.
Cash
101 7,200 Accounts Receivable
106
7,200
Collected cash on account.
l. Wages Expense 601 1,500 Cash 101 1,500
Paid assistants wages.
m. Accounts Payable 201 2,250
Cash 101
Paid amount due on account.
2,250
n. Repairs Expense 604 675
Cash
repair of equipment.
101 675
Paid for
o. S. Shelton, Withdrawals
302 9,360 Cash 101 p. Wages Expense 601 1,500 Cash
Paid assistants wages.
9,360
Cash withdrawn for personal use.
101 1,500
q. Advertising Expense 603 3,000 Cash 3,000
Paid for advertising expense.
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
No. 106 Balance 12,000 30,000 22,800
S. Shelton, Withdrawals Date PR (o) Debit 9,360 Credit
No. 302 Balance 9,360
Engineering Fees Earned Date PR Debit Credit 5,700 12,000 18,000
No. 402 Balance 5,700 17,700 35,700
Prepaid Insurance Date PR (d) Debit 6,000 Credit
No. 108 Balance 6,000
(e) (g) (i)
Office Equipment Date PR (a) (h) Debit 6,000 2,250 Credit
No. 163 Balance 6,000 8,250
Wages Expense Date PR (l) (p) Debit 1,500 1,500 Credit
No. 601 Balance 1,500 3,000
Drafting Equipment Date PR (a) (f) Debit 45,000 22,500 Credit
No. 164 Balance 45,000 67,500
Equipment Rental Expense Date PR (j) Debit 1,200 Credit
No. 602 Balance 1,200
Building Date PR (c) Debit 75,000 Credit
No. 170 Balance 75,000
Advertising Expense Date PR (q) Debit 3,000 Credit
No. 603 Balance 3,000
Land Date PR (b) Debit 54,000 Credit
No. 172 Balance 54,000
Repairs Expense Date PR (n) Debit 675 Credit
No. 604 Balance 675
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
