Aracel Engineering completed the following transactions
Aracel Engineering completed the following transactions in the month of June.
a. J. Aracel, the owner, invested $250,000 cash, office equipment with a value of $6,700, and $72,000 of drafting equipment to launch the company.
| Transaction No. | Account Title | Debit | Credit |
|---|---|---|---|
| a | Cash (101) | 250,000 | |
| Office Equipment (163) | 6,700 | ||
| Drafting Equipment (164) | 72,000 | ||
| J. Aracel, Capital (301) | 328,700 |
b. The company purchased land worth $53,000 for an office by paying $7,200 cash and signing a note payable for $45,800. c. The company purchased a portable building with $54,000 cash and moved it onto the land acquired in b.
| Transaction No. | Account Title | Debit | Credit |
|---|---|---|---|
| b | Land (172) | 53,000 | |
| Cash (101) | 7,200 | ||
| Notes Payable (250) | 45,800 |
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d. The company paid $4,700 cash for the premium on an 18-month insurance policy.
e. The company provided services to a client and collected $8,500 cash.
f. The company purchased $29,000 of additional drafting equipment by paying $11,600 cash and signing a note payable for $17,400.
g. The company completed $19,500 of services for a client. This amount is to be received in 30 days.
h. The company purchased $1,100 of additional office equipment on credit.
i. The company completed $29,000 of services for a customer on credit.
j. The company purchased $1,634 of TV advertising on credit.
k. The company collected $6,000 cash in partial payment from the client described in transaction g.
1. The company paid $1,600 cash for employee wages.
m. The company paid $1,100 cash to settle the account payable created in transaction h.
n. The company paid $1,170 cash for repairs.
o. J. Aracel withdrew $9,680 cash from the company for personal use.
p. The company paid $2,000 cash for employee wages.
q. The company paid $3,500 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 (170); Land (172); Accounts Payable (201); Notes Payable (250); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Services Revenue (403); Wages Expense (601); Advertising Expense (603); and Repairs Expense (604).
2. Post the journal entries from part 1 to the ledger accounts.
Prepare a trial balance as of the end of June
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Correct Answer
| Transaction No. | Account Title | Debit | Credit |
|---|---|---|---|
| a | Cash (101) | 250,000 | |
| Office Equipment (163) | 6,700 | ||
| Drafting Equipment (164) | 72,000 | ||
| J. Aracel, Capital (301) | 328,700 | ||
| b | Land (172) | 53,000 | |
| Cash (101) | 7,200 | ||
| Notes Payable (250) | 45,800 | ||
| c | Building (170) | 54,000 | |
| Cash (101) | 54,000 | ||
| d | Prepaid Insurance (108) | 4,700 | |
| Cash (101) | 4,700 | ||
| e | Cash (101) | 8,500 | |
| Services Revenue (403) | 8,500 |
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