Question

Turner Engineering completed the following transactions in the month of June. Using the following transactions, record journal entries, create financial statements, and assess the impact of each transaction on the financial statements. Jun. 1 Tony Turner, the owner, invested $144,000 cash, office equipment with a value of $16,000, and 582,000 of drafting equipment to launch the company. Jun. 2 The company purchased land worth $60,000 for an office by paying $21,700 cash and signing a long-tern note payable for $38,300. Jun. 3 The company purchased a portable building with $44,000 cash and moved it onto the land acquired on June 2. Jun. 4 The company paid $9,600 cash for the premium on an 18-month insurance policy. Jun. The company completed and delivered a set of plans for a client and collected $15,000 cash. Jun. 6 The company purchased $33,200 of additional drafting equipment by paying $20,500 cash and signing a long-term note payable for $12,700. Jun. 7 The company completed $31,600 of engineering services for client. This amount is to be received in 30 days. Jun. The company purchased $2,250 of additional office equipment on credit. Jun. The company completed engineering services for $26,400 on credit Jun. 10 The company received a bill for rent of equipment that was used on a recently completed job. The $2,400 rent cost must be paid within 30 days. Jun. 12 The company collected $15, 800 cash in partial payment from the client billed on June 9. Jun. 14 The company paid $2,000 cash for wages to a drafting assistant Jun. 17 The company paid $2,250 cash to settle the account payable created in on June 8. Jun. 20 The company paid $1,475 cash for minor maintenance of its drafting equipment. Jun. 23 Tony Turner withdrew $9,920 cash from the company for personal use. Jun. 28 The company paid $2,000 cash for wages to a drafting assistant Jun. 29 The company paid $3,300 cash for advertisements on the web during June

Answer 1

1.

Prepare journal entries as follows:

Date	Accounts Titles	Debit	Credit
June 01	Cash	$144,000
	Office equipment	$16,000
	Drafting equipment	$82,000
	Common stock		$242,000
June 02	Land	$60,000
	Note payable		$38,300
	Cash		$21,700
June 03	Building	$44,000
	Cash		$44,000
June 04	Prepaid insurance	$9,600
	Cash		$9,600
June 05	Cash	$15,000
	Service revenue		$15,000
June 06	Drafting Equipment	$33,200
	Note payable		$12,700
	Cash		$20,500
June 07	Accounts receivable	$31,600
	Service revenue		$31,600
June 08	Office equipment	$2,250
	Accounts payable		$2,250
June 09	Accounts receivable	$26,400
	Service revenue		$26,400
June 10	Rental expense	$2,400
	Accounts payable		$2,400
June 12	Cash	$15,800
	Accounts receivable		$15,800
June 14	Wage expense	$2,000
	Cash		$2,000
June 17	Accounts payable	$2,250
	Cash		$2,250
June 20	Maintenance expense	$1,475
	Cash		$1,475
June 23	Drawings	$9,920
	Cash		$9,920
June 28	Wage expense	$2,000
	Cash		$2,000
June 29	Advertising expense	$3,380
	Cash		$3,380
June 30	Insurance expense ($9600/18)	$533
	Prepaid insurance		$533

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Prepare Income statement as follows:

Turner Engineering
Income statement
For Month Ended June 30, 2017
Revenue:
Service revenue ($15,000+ $31,600+$26400)		$73,000
Less: operating expenses
Wages expense ($2000 + $2000)	($4,000)
Rental Expense	($2,400)
Maintenance expense	($1,475)
Advertising expense	($3,380)
Insurance expense	($533)	($11,788)
Net Income		$61,212

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Prepare statement of owner's equity as follows:

Turner Engineering
Statement of Owner's Equity
For Month Ended June 30, 2017
Beginning capital		-
Add: On June 01		$242,000
Less: Drawings		($9,920)
Add: Net Income		$61,212
Ending balance		$293,292

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Prepare Balance Sheet as follows:

Turner Engineering
Balance Sheet
June 30, 2017
Assets
Current assets:
Cash	$57,975
Accounts receivable ($31600+$26400-$15800)	$42,200
Prepaid insurance ($9600-$533)	$9,067
Total Current assets		$109,242
Property, plant and Equipment
Office Equipment ($16000+$2250)	$18,250
Drafting equipment ($82000+$33200)	$115,200
Land	$60,000
Building	$44,000	$237,450
Total Assets		$346,692
Liabilities
Accounts payable ($2250+$2400-$2250)		$2,400
Note payable ($38300+$12700)		$51,000
Owner's equity		$293,292
Total liabilities and Owner's Equity		$346,692