Exercise(part2-3)

? q. The company paid $2,400 cash for advertisements in the local newspaper during June.

Required: ?

1) Prepare general journal entries to record these transactions. ( use the account titles listed in 2))

Cash; Accounts Receivable； Prepaid Insurance； Office Equipment； Draft Equipment；Building；Land；Accounts Payable; Notes Payable; Paid-in Capital; Engineering Fees Earned; Wages Expense; Equipment Rental Expense; Advertising Expense; Repairs Expense ? ?

2) Post the journal entries form 1) to the accounts and enter the balance after each posting. 3) Prepare a trial balance as of the end of June.

Answer: 1)

a. Dr. Cash ............................................................ 195,000 Office Equipment ................................................... 8,200 Drafting Equipment ................................................ 80,000

Cr. J. Lancet, Capital ............................................ 283,200

Owner invested cash and equipment.

b. Dr. Land ............................................................. 52,000

Cr. Cash .......................................................... 8,900

Note Payable ............................................. 43,100

Purchased land with cash and note payable. c. Dr. Building.......................................................... 55,000

Cr. Cash ............................................................ 55,000

Purchased building. d. Dr. Prepaid Insurance .............................................. 2,300

Cr. Cash ........................................................ 2,300

Purchased 18-month insurance policy. e. Dr. Cash ............................................................. 6,600

Cr. Engineering Fees Earned ................................. 6,600

Collected cash for completed work. f. Dr. Drafting Equipment ............................................. 24,000

Cr. Cash ......................................................... 9,600

Note Payable ............................................... 14,400

Purchased equipment with cash and note payable.

g. Dr. Accounts Receivable ............................................ 14,500

Cr. Engineering Fees Earned ........................................ 14,500

Completed services for client.

h. Dr. Office Equipment ................................................ 1,100

Cr. Accounts Payable ................................................ 1,100

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Purchased equipment on credit. i. Dr. Accounts Receivable .............................................. 23,000 Cr. Engineering Fees Earned ......................................... 23,000

Billed client for completed work. j. Dr. Equipment Rental Expense ........................................ 1,410 Cr. Accounts Payable .................................................. 1,410

Incurred equipment rental expense. k. Dr. Cash 8,000

Cr. Accounts Receivable ............................................... 8,000

Collected cash on account.

L. Dr. Wages Expense.................................................. 2,500

Cr. Cash ............................................................. 2,500

Paid assistant’s wages.

m. Dr. Accounts Payable ................................................ 1,100

Cr. Cash ............................................................. 1,100

Paid amount due on account. n. Dr. Repairs Expense ............................................... 970

Cr. Cash ..........................................................970

Paid for repair of equipment.

o. Dr. Paid-in Capital .................................................. 10,450

Cr. Cash .............................................................. 10,450

Owner withdrew cash.

p. Dr. Wages Expense ................................................... 2,000

Cr. Cash ........................................................ 2,000

Paid assistant’s wages.

q. Dr. Advertising Expense .......................................... 2,400

Cr. Cash .................................................... 2,400

Paid for advertising expense. The next all are closing entries:

r. Dr. Engineering Fees Earned ........................................ 44,100

Cr. Paid-in Capital ........................................... 44,100

Cr. Wages Expense .......................................... 4,500 Advertising Expense ......................................... 2,400 Repairs Expense ................................................ 970

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s. Dr. Paid-in Capital ................................................... 9,280 Equipment Rental Expense ................................... 1,410

Part 2 Cash Date (a) (b) (c) (d) (e) (f) (k) (l) (m) (n) (o) (p) (q) Date (g) (i) (k) PR PR Debit 14,500 23,000 Debit 195,000 6,600 8,000 Credit 8,000 Credit 8,900 55,000 2,300 9,600 2,500 1,100 970 10,450 2,000 2,400 Balance Balance

195,000 186,100 131,100 128,800 135,400 125,800 133,800 131,300 130,200 129,230 118,780 116,780 114,380

Accounts Payable Date (h) (j) (m) Date (b) (f) Date (a) (o) (r ) (s) Date (e) (g) (i) (r) PR 44,100 Debit PR PR PR 9,280 Credit 6,600 14,500 23,000 Debit 10,450 Balance 6,600 21,100 44,100 0 Debit 2,500 2,000 Credit 4,500 Balance 2,500 4,500 0 Credit 1,410 Credit Balance 2,400 Debit 2,400 Balance 1,410 0 Debit Credit 283,200 44,100 Debit 1,100 Credit 43,100 14,400 Balance 283,200 272,750 316,850 307,570 Credit 1,100 1,410 Balance 43,100 57,500 Balance 1,100 2,510 1,410 Notes Payable Paid-in Capital Accounts Receivable 14,500 37,500 29,500

Engineering Fees Earned Prepaid Insurance Date (d) PR Debit 2,300 Credit Balance

2,300

Office Equipment Date (a) (h) PR Debit 8,200 1,100 Credit Balance Wages Expense Date (l) (p) (s) PR

8,200 9,300

Drafting Equipment Date (a) (f) Building Date (c)

PR Debit 55,000 Credit Balance PR Debit 80,000 24,000 Credit Balance Equipment Rental Expense Date (j) (s) Date (q) PR PR Debit 1,410

80,000 104,000

55,000

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Advertising Expense Land Date (b)

(s) 2,400 0 Repairs Expense Date (n) (s) PR Debit 970 Credit 970 Balance PR Debit 52,000 Credit Balance

52,000 970 0 Part 3 LANCET ENGINEERING

Trial Balance June 30

Debit

Credit

$114,380 29,500 2,300 9,300 104,000 55,000 52,000

$ 1,410

57,500

Cash .......................................................... Accounts receivable ......................................... Prepaid insurance ............................................ Office equipment ............................................ Drafting equipment .......................................... Building ...................................................... Land .......................................................... Accounts payable ............................................ Notes payable ...............................................

Paid-in Capital ............................................... 307,570 Totals ........................................................

$366,480 $366,480 8