Question 1

Gary Bauer opens a computer consulting business called Consultants and completes the following transactions i. Bauer invested $100,000 cash along with $24,000 in office equipment in the company. ii. The owner invested again $105,000 cash, office equipment with a value of $6,000, and $45,000 of drafting equipment to launch the company. iii. The company prepaid $7,200 cash for twelve months rent for an office. (Hint: Debit Prepaid Rent for $7,200.) iv. The company made credit purchases of office equipment for $12,000 and office supplies for $2,400. v. The company completed services for a client and immediately received $2,000 cash. vi. The company completed an $8,000 project for a client, who must pay within 30 days. vii. The company paid $14,400 cash to settle the account payable. viii. The company paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.) ix. The company received $6,400 cash as partial payment for the work completed. x. The company completed work for another client for $2,640 on credit. xi. Bauer withdrew $6,200 cash from the company for personal use. xii. The company purchased $800 of additional office supplies on credit. xiii. The company paid $700 cash for this months utility bill. xiv. The company purchased land worth $54,000 for an office by paying $5,400 cash and signing a long-term note payable for $48,600. xv. The company purchased a portable building with $75,000 cash and moved it onto the land acquired. xvi. The company paid $6,000 cash for the premium on an 18-month insurance policy. xvii. The company completed and delivered a set of plans for a client and collected $5,700 cash. xviii. The company purchased $22,500 of additional drafting equipment by paying $10,500 cash and signing a long-term note payable for $12,000. xix. The company completed $12,000 of engineering services for a client. This amount is to be received in 30 days. xx. The company purchased $2,250 of additional office equipment on credit. xxi. The company completed engineering services for $18,000 on credit. xxii. 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. xxiii. The company collected $7,200 cash in partial payment from the client. xxiv. The company paid $1,500 cash for wages to a drafting assistant. xxv. The company paid $2,250 cash to settle the account payable. xxvi. The company paid $675 cash for minor maintenance of its drafting equipment. xxvii. Owner withdrew $9,360 cash from the company for personal use. xxviii. The company paid $1,500 cash for wages to a drafting assistant. xxix. The company paid $3,000 cash for advertisements in the local newspaper during June.

Required

i. Prepare accounting equation. ii. Prepare general journal entries to record these transactions. iii. Open the ledger accounts and calculate the ledger balances. iv. Prepare a trial balance. v. Prepare any 3 financial statements with the help of trial balance created under requirement iii.