Question

Learning Objectives 4, 5, 6: Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operation of Gordon Construction, Inc., completed the following transactions: June 2 Gordon received $55,000 cash and issued common stock to the stockholders. 3 Purchased supplies, $3,000, and equipment, $5,200, on account. 4 Performed services for a client and received cash, $6,300. 7 Paid cash to acquire land, $37,000. 11 Performed services for a customer and billed the customer, $1,200. Johnson expects to collect within one month. 16 Paid partial for the equipment purchased June 3 on account $2,800. 17 Paid the telephone bill, $230. 18 Received partial payment from customer on account, $700. 22 Paid the water and electricity bills, $400. 29 Received $5,000 cash for repairing the pipes of a customer. 30 Paid employee salary, $4,300. 30 Declared and paid dividends of $3,000. ▸Requirements • 1. Record each transaction in the journal. Key each transaction by date. Explanations are not required. • 2. Post the transactions to the T-accounts, using transaction dates as posting references. • 3. Prepare the trial balance of Gordon Construction, Inc., at June 30, 20xx. • 4. The manager asks you how much in total resources the business has to work with and, how much it owes. Case Study 1 (Part B) Requirement 2 (Learning Objectives 3, 4: Adjust the accounts; construct the financial statements) Record the following month end adjusting entries for Gordon Construction, Inc. at June 30, 20xx Month end accruals at June 30, 20xx: • a. Accrued advertising revenue at June 30, $3,100. • b. Supplies used during June, $2,300. • c. Accrued salary expense at June 30 for Monday, Tuesday, and Wednesday. The five-day weekly payroll is $6,100 and will be paid on Friday. Requirement 2 Prepare adjusted trial balance for Gordon Construction at June 30, 20xx. How much are the total resources? How much does the business owe? How much profit was made in June?

Answer 1

SOLUTION:-

Journal Entries:

Date	Account Title	Debit	Credit
June-2	Cash	55,000
	Commom Stock		55,000
	(Recording of issue of common stock)
June-3	Supplies	3,000
	Equipment	5,200
	Account Payable		8,200
	(Recording of purchase of supplies and equipment)
June-4	Cash	6,300
	Revenue		6,300
	(Recording of Revenue)
June-7	Land	37,000
	Cash		37,000
	(Recording of Purchase of Land)
June-11	Account Receivable	1,200
	Revenue		1,200
	(Recording of services performed on account)
June-16	Account Payable	2,800
	Cash		2,800
	(Recording of Payment made)
June-17	Telephone Expenses	230
	Cash		230
	(Recording of Payment of Telephone Expenses)
June-18	Cash	700
	Account Receivable		700
	(Recording of collection of Cash)
June-22	Electricity and Water Expenses	400
	Cash		400
	(Recording of Payment of Bills)
June-29	Cash	5,000
	Revenue		5,000
	(Recording of Cash received)
June-30	Salary	4,300
	Cash		4,300
	(Recording of payment of Salary)
June-30	Retained Earnings	3,000
	Cash		3,000
	(Recording of Declaration and Payment of Div.)

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