Jenna Aracel opened a business called Aracel Engineering and recorded the following transactions in its first month of operations.
Jun. | | 1 | | Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock. |
Jun. | | 2 | | The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700. |
Jun. | | 2 | | The company purchased a portable building with $55,000 cash and moved it onto the land acquired on June 2. |
Jun. | | 2 | | The company paid $3,000 cash for the premium on a 15-month insurance policy. |
Jun. | | 7 | | The company completed and delivered a set of plans for a client and collected $6,200 cash. |
Jun. | | 12 | | The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500. |
Jun. | | 14 | | The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days. |
Jun. | | 15 | | The company purchased $1,150 of additional office equipment on credit. |
Jun. | | 17 | | The company completed engineering services for $22,000 on credit. |
Jun. | | 18 | | The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days. |
Jun. | | 20 | | The company collected $7,000 cash in partial payment from the client billed on June 14. |
Jun. | | 21 | | The company paid $1,200 cash for wages to a drafting assistant. |
Jun. | | 23 | | The company paid $1,150 cash to settle the account payable created on June 15. |
Jun. | | 24 | | The company paid $925 cash for minor maintenance of its drafting equipment. |
Jun. | | 26 | | The company paid $9,480 cash in dividends. |
Jun. | | 28 | | The company paid $1,200 cash for wages to a drafting assistant. |
Jun. | | 30 | | The company paid $2,500 cash for advertisements on the web during June. |
Descriptions of items that require adjusting entries on June 30, follow.
a) The company has completed, but not yet billed, $6,000 of engineering services for a client.
b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $150 salvage value, is $100 per month.
c) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $2,000 salvage value, is $1,300 per month.
d) Straight-line depreciation on the building, assuming a 25-year life and a $1,000 salvage value, is $180 per month.
e) The balance in prepaid insurance represents a 15-month policy that went into effect on June 1.
f) Accrued interest on the long-term note payable is $75.
g) The drafting assistant is paid $1,200 for a 5-day work week. 2 days' wages have been incurred but are unpaid as of month-end.
GLO304 - Extension of Problem 2-2A Aracel Engineering LO P1, P2, P3, P4, P5, P6 Jun. Jun Jun Jenna Aracel opened a business called Aracel Engineering and recorded the following transactions in its first month of operations. Jun. 1 Jenna Aracel, the owner, invested $100,eee cash, office equipment with a value of $5,eee, and $50,eee of drafting equipment to launch the company in exchange for common stock. Jun. 2 The company purchased land worth $49,ege for an office by paying $6,3ee cash and signing a long-tere nate payable for $42,780. 2 The company purchased a portable buliding with $55,eee cash and moved it onto the land acquired on June 2. 2 The company paid $3,00 cash for the premium on a 15-month insurance policy. 7 The company completed and delivered a set of plans for a client and collected $6,2ae cash. Jun. 12 The company purchased $20,eee of additional drafting equipment by paying 39,5ee cash and signing a long-term note payable for $19,500 Jun. 14 The company completed $14,6ee of engineering services for a client. This amount is to be received in 30 days. Jun. 15 The company purchased $1,158 of additional office equipment on credit. Jun. 17 The company completed engineering services for $22,eee on credit. Jun. 18 The company received a bill for rent of equipment that was used on a recently completed job. The $1,33 rent cost must be paid within 30 days. Jun. 22 The company collected $7,eee cash in partial payment from the client billed on June 14. Jun. 21 The company paid $1,200 cash for wages to a drafting assistant. Jun. 23 The company paid $1,150 cash to settle the account payable created on June 15. Jun. 24 The company paid $925 cash for minor maintenance of its drafting equipment. Jun. 26 The company paid 59,480 cash in dividends. Jun. 28 The company paid $1,200 cash for wages to a drafting assistant. Dun. 30 The company paid $2,588 cash for advertisements on the web during June. Descriptions of items that require adjusting entries on June 30, follow. 2) The company has completed, but not yet billed. $6.000 of engineering services for a client b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $150 salvage value, is $100 per month C) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $2.000 salvage value, is $1.300 per month. d) Straight-line depreciation on the building, assuming a 25-year life and a $1.000 salvage value, is $180 per month e) The balance in prepaid insurance represents a 15-month policy that went into effect on June 1. f) Accrued interest on the long-term note payable is $75. 9) The drafting assistant is paid $1.200 for a 5-dey work week. 2 days' wages have been incurred but are unpaid as of month-end. Requirement General Joumal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income For each adjustment indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the drop-down.) Show less General General Income Impact on St Retained Requirement Trial Balance Journal Balance Sheet Ledger Statement Earnings Income For transactions a-g, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. Each adjustment is posted automatically to the general ledger and trial balance as soon as you click "record entry". Show less View transaction list View journal entry worksheet Account Title Debit Credit No 1 Date Jun 30 100.000 Cash Office equipment Drafting equipment Common stock 5.000 60.000 165,000 2 Jun 30 49.000 Land Cash Long-term notes payable 6,300 42,700 3 Jun 30 55.000 Building Cash 55,000 4 Jun 30 3.000 Prepaid insurance Cash 3,000 5 Jun 30 8.200 Cash Engineering fees earned 6.200 I 8 Jun 30 20.000 Drafting equipment Cash Long-term notes payable 9.500 10,500 7 Jun 30 14.000 Accounts receivable Engineering fees earned 14,000 Requirement General Journal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjusted balances will appear for each account, based on your selection. Adjusted ARACEL ENGINEERING Income Statement For Month Ended June 30, 2019 Revenues: Insurance expense S 0 0 $ 0 Expenses: 0 0 0 0 0 0 0 0 0 0 0 Net income S Requirement General Journal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income The unadjusted or adjusted balances will appear for each account, based on your selection. Adjusted ARACEL ENGINEERING Statement of Retained Earnings For Month Ended June 30, 2019 Retained earnings, June 1, 2019 Add: Net income Less: Dividends Retained earnings, June 30, 2019 s 0 (9.480) Adjusted ARACEL ENGINEERING Balance Sheet June 30, 2019 ASSETS Current assets S 0 0 0 0 $ 0 Plant assets 0 0 0 0 S 0 LIABILITIES AND EQUITY Liabilities $ 0 0 0 0 0 Equity 0 0 S 0 Requirement General Journal General Ledger Trial Balance Income Statement St Retained Earnings Balance Sheet Impact on Income For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the drop-down.) Show less Adjusted Account affecting the Income Statement Balance Sheet Impact on net income Adjusting entry related to: a) Unbilled fees b) Depreciation of office equipment c) Depreciation of drafting equipment d) Depreciation of building e) Prepaid insurance 1) Accrued interest 9) Unpaid wages $ 0 $ 0 Had the adjustments not been prepared, income would have been understated by
