Reference no: EM13849388

Case Study 1 (Part A)

(Learning Objectives 4, 5, 6: Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operation of Gordon Construction, Inc., completed the following transactions:

June 2	Gordon received $55,000 cash and issued common stock to the stockholders.
3	Purchased supplies, $3,000, and equipment, $5,200, on account.
4	Performed services for a client and received cash, $6,300.
7	Paid cash to acquire land, $37,000.
11	Performed services for a customer and billed the customer, $1,200. Johnson expects to collect within one month.
16	Paid partial for the equipment purchased June 3 on account $2,800.
17	Paid the telephone bill, $230.
18	Received partial payment from customer on account, $700.
22	Paid the water and electricity bills, $400.
29	Received $5,000 cash for repairing the pipes of a customer.
30	Paid employee salary, $4,300.
30	Declared and paid dividends of $3,000.

Requirements

• 1. Record each transaction in the journal. Key each transaction by date. Explanations are not required.
• 2. Post the transactions to the T-accounts, using transaction dates as posting references.
• 3. Prepare the trial balance of Gordon Construction, Inc., at June30, 20xx.
• 4. The manager asks you how much in total resources the business has to work with and, how much it owes.

Case Study 1 (Part B)

Requirement 1

(Learning Objectives 3, 4: Adjust the accounts; construct the financial statements) Record the following month end adjusting entries for Gordon Construction, Inc. at June 30, 20xx

Month end accruals at June 30, 20xx:

• a. Accrued advertising revenue at June 30, $3,100.
• b. Supplies used during June, $2,300.
• c. Accrued salary expense at June 30 for Monday, Tuesday, and Wednesday. The five-day weekly payroll is $6,100 and will be paid on Friday.

Requirement 2

Prepare adjusted trial balance for Gordon Construction at June 30, 20xx.