Question

Aracel Engineering completed the following transactions in the month of June. a. 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. b. 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. c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b. d. The company paid $3,000 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 $6,200 cash. f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500. g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days. h. The company purchased $1,150 of additional office equipment on credit. i. The company completed engineering services for $22,000 on credit. j. 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. k. The company collected $7,000 cash in partial payment from the client described in transaction g. 1. The company paid $1,200 cash for wages to a drafting assistant. m. The company paid $1,150 cash to settle the account payable created in transaction h. n. The company paid $925 cash for minor maintenance of its drafting equipment. o. The company paid a $9,480 cash dividend. p. The company paid $1,200 cash for wages to a drafting assistant. q. The company paid $2,500 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); Common Stock (307); Dividends (319); 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.

I have some wrong answers, please correct this.

Answer 1

Mistakes are highlighted in orange color below:-

Make sure all entries are passed correctly to these accounts - may check in T Accounts or journal entries below

Aracel Engineering Account Names Cash Accounts Receivable Prepaid Insurance Office Equipment Drafting Equipment Building Land Accounts Payable Notes Payable Common Stock Dividends Engineering Fees Earned Wages Expense Equipment Rental Expense Advertising Expense Repairs Expense Totals Trial Balance Debit Credit 22,945 29,000 3,000 6,150 80,000 55,000 49,000 1,333 53,200 165,000 9,480 42,200 2,400 1,333 2,500 925 261,733 261,733

Credit Aracel Engineering Journal entries Date Account Cash Office Equipment Drafting Equipment Common Stock а Debit $ 100,000 $ 5,000 $ 60,000 $ 165,000 $ 49,000 Land Cash Notes Payable $ $ 6,300 42,700 $ 55,000 Building Cash $ 55,000 d $ 3,000 Prepaid Insurance Cash $ 3,000 $ 6,200 Cash Engineering Fees Earned $ 6,200 f Drafting Equipment $ 20,000 Cash $ $ 9,500 10,500 Notes Payable $ 14,000 Accounts Receivable Engineering Fees Earned $ 14,000 $ 1,150 Office Equipment Accounts Payable $ 1,150 $ 22,000 Accounts Receivable Engineering Fees Earned $ 22,000 $ 1,333 Equipment Rental Expense Accounts Payable $ 1,333 $ 7,000 Cash Accounts Receivable $ 7,000 $ 1,200 Wages Expense Cash $ 1,200 m $ 1,150 Accounts Payable Cash $ 1,150 $ 925 Repairs Expense Cash $ 925 0 $ 9,480 Dividends Cash $ 9,480 $ 1,200 Wages Expense Cash $ 1,200 9 $ 2,500 Advertising Expense Cash $ 2,500

Credit Date Date Credit Date Credit Aracel Engineering T Accounts Date Debit Date Cash a $100,000 b $ 6,200 k $ 7,000 Debit Date Credit Accounts Receivable $ 14,000 $ 22,000 k $ 7,000 Debit Date Prepaid Insurance $ 3,000 Debit Date Office Equipment $ 5,000 $ 1,150 d h OD - + $ 6,300 $ 55,000 $ 3,000 $ 9,500 $ 1,200 $ 1,150 $ 925 $ 9,480 $ 1,200 $ 2,500 Bal. Bal. Bal. Bal. $ 6,150 $ 22,945 Drafting Equipment $ 60,000 $ 20,000 $ 29,000 Building $ 55,000 $ 3,000 Land $49,000 а C b Bal. Bal. $ 80,000 Accounts Payable $ 1,150 h $ 55,000 Notes Payable b f $ 49,000 Common Stock m Dividends $ 9,480 $ 165,000 0 $ 1,150 $ 1,333 $ 42,700 $ 10,500 $ 53,200 Bal. Bal. $ 1,333 Engineering Fees Earned e $ 6,200 8 $ 14,000 $ 22,000 Bal. Wages Expense $ 1,200 $ 1,200 Bal. $ 165,000 Equipment Rental Expense $ 1,333 $ 9,480 Advertising Expense $ 2,500 a $ 42,200 Bal. $ 2,400 $ 1,333 $ 2,500 Bal. Repairs Expense $ 925 n Bal. $ 925