Reference no: EM131528171

Question: Shelton Engineering completed the following transactions in the month of June.

a. Shana Shelton, the owner, invested $105,000 cash, office equipment with a value of $6,000, and $45,000 of drafting equipment to launch the company.

b. The company purchased land worth $54,000 for an office by paying $5,400 cash and signing a longterm note payable for $48,600.

c. The company purchased a portable building with $75,000 cash and moved it onto the land acquired in b.

d. The company paid $6,000 cash for the premium on an 18-month insurance policy.

e. The company completed and delivered a set of plans for a client and collected $5,700 cash.

f. The company purchased $22,500 of additional drafting equipment by paying $10,500 cash and signing a long-term note payable for $12,000.

g. The company completed $12,000 of engineering services for a client. This amount is to be received in 30 days.

h. The company purchased $2,250 of additional office equipment on credit.

i. The company completed engineering services for $18,000 on credit.

j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,200 rent cost must be paid within 30 days.

k. The company collected $7,200 cash in partial payment from the client described in transaction g.

l. The company paid $1,500 cash for wages to a drafting assistant.

m. The company paid $2,250 cash to settle the account payable created in transaction h.

n. The company paid $675 cash for minor maintenance of its drafting equipment.

o. S. Shelton withdrew $9,360 cash from the company for personal use.

p. The company paid $1,500 cash for wages to a drafting assistant.

q. The company paid $3,000 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 part 2).

2. Open the following ledger accounts-their 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 June.