Aracel Engineering completed the following transactions in the month of June. Jenna Aracel, the owner, invested $170,000 cash, office equipment with a value of $8,500, and $62,000 of drafting equipment to launch the company. The company purchased land worth $53,000 for an office by paying $8,800 cash and signing a long-term note payable for $44,200. The company purchased a portable building with $56,000 cash and moved it onto the land acquired in b. The company paid $2,200 cash for the premium on an 18-month insurance policy. The company completed and delivered a set of plans for a client and collected $9,700 cash. The company purchased $35,000 of additional drafting equipment by paying $10,300 cash and signing a long-term note payable for $24,700. The company completed $16,500 of engineering services for a client. This amount is to be received in 30 days. The company purchased $1,050 of additional office equipment on credit. The company completed engineering services for $28,000 on credit. The company received a bill for rent of equipment that was used on a recently completed job. The $1,604 rent cost must be paid within 30 days. The company collected $8,000 cash in partial payment from the client described in transaction g. The company paid $1,400 cash for wages to a drafting assistant. The company paid $1,050 cash to settle the account payable created in transaction h. The company paid $1,195 cash for minor maintenance of its drafting equipment. Jenna Aracel withdrew $9,600 cash from the company for personal use. The company paid $1,100 cash for wages to a drafting assistant. The company paid $3,200 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); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of the end of June.

Aracel Engineering completed the following transactions in the month of June. Jenna Aracel, the owner, invested $170,000 cash, office equipment with a value of $8,500, and $62,000 of drafting equipment to launch the company. The company purchased land worth $53,000 for an office by paying $8,800 cash and signing a long-term note payable for $44,200. The company purchased a portable building with $56,000 cash and moved it onto the land acquired in b. The company paid $2,200 cash for the premium on an 18-month insurance policy. The company completed and delivered a set of plans for a client and collected $9,700 cash. The company purchased $35,000 of additional drafting equipment by paying $10,300 cash and signing a long-term note payable for $24,700. The company completed $16,500 of engineering services for a client. This amount is to be received in 30 days. The company purchased $1,050 of additional office equipment on credit. The company completed engineering services for $28,000 on credit. The company received a bill for rent of equipment that was used on a recently completed job. The $1,604 rent cost must be paid within 30 days. The company collected $8,000 cash in partial payment from the client described in transaction g. The company paid $1,400 cash for wages to a drafting assistant. The company paid $1,050 cash to settle the account payable created in transaction h. The company paid $1,195 cash for minor maintenance of its drafting equipment. Jenna Aracel withdrew $9,600 cash from the company for personal use. The company paid $1,100 cash for wages to a drafting assistant. The company paid $3,200 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); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of the end of June.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Aracel Engineering completed the following transactions in the month of June.

Jenna Aracel, the owner, invested $170,000 cash, office equipment with a value of $8,500, and $62,000 of drafting equipment to launch the company.
The company purchased land worth $53,000 for an office by paying $8,800 cash and signing a long-term note payable for $44,200.
The company purchased a portable building with $56,000 cash and moved it onto the land acquired in b.
The company paid $2,200 cash for the premium on an 18-month insurance policy.
The company completed and delivered a set of plans for a client and collected $9,700 cash.
The company purchased $35,000 of additional drafting equipment by paying $10,300 cash and signing a long-term note payable for $24,700.
The company completed $16,500 of engineering services for a client. This amount is to be received in 30 days.
The company purchased $1,050 of additional office equipment on credit.
The company completed engineering services for $28,000 on credit.
The company received a bill for rent of equipment that was used on a recently completed job. The $1,604 rent cost must be paid within 30 days.
The company collected $8,000 cash in partial payment from the client described in transaction g.
The company paid $1,400 cash for wages to a drafting assistant.
The company paid $1,050 cash to settle the account payable created in transaction h.
The company paid $1,195 cash for minor maintenance of its drafting equipment.
Jenna Aracel withdrew $9,600 cash from the company for personal use.
The company paid $1,100 cash for wages to a drafting assistant.
The company paid $3,200 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); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of the end of June.

**Prepare a Trial Balance for Aracel Engineering**

In this exercise, you are required to prepare a trial balance for Aracel Engineering as of the end of June. The trial balance is a crucial accounting report that lists the balances of all ledger accounts and is used to verify that the total debits equal the total credits.

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**Instructions:**

1. **Title and Heading:**
- You will start by identifying the company name, the report title, and the date at which the trial balance is prepared.
- Company Name: ARACEL ENGINEERING
- Report Title: Trial Balance
- Date: June 30

2. **Create Columns:**
- Create four columns: one for the account names, one for the debit balances, and one for the credit balances.

3. **List of Accounts:**
- Enter the names of all the accounts.

4. **Balances:**
- Enter the debit or credit balance of each account. Each account should be entered in the appropriate column.

5. **Totals:**
- Calculate the totals for the debit and credit columns.

Here is the basic structure:

| Account Name | Debit | Credit |
|--------------|-------|--------|
| Account 1 | | |
| Account 2 | | |
| ... | | |
| Totals | | |

**Important Notes:**
- The total of the debit balances should equal the total of the credit balances. If they do not, it indicates an error in the ledger accounts.

**Trial Balance Example**

Below is an example of a template for your trial balance.

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**ARACEL ENGINEERING**

**Trial Balance**

**June 30**

| Account Name | Debit | Credit |
|-------------------|-------|--------|
| Cash | 10,000| |
| Accounts Receivable| 8,000| |
| Office Supplies | 2,000 | |
| Equipment | 20,000| |
| Accounts Payable | | 5,000 |
| Salaries Payable | | 2,000 |
| Common Stock | | 30,000 |
| Retained Earnings | | 3,000 |
| Totals | 40,000| 40,000 |

*Note: The debit and credit sections should balance.*

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