In: Accounting
Than Nguyen opened a business called Nguyen Engineering and
recorded the following transactions in its first month of
operations.
Jun. | 1 | Than Nguyen, the owner, invested $158,000 cash, office equipment with a value of $19,500, and $89,000 of drafting equipment to launch the company. | ||
Jun. | 2 | The company purchased land worth $63,500 for an office by paying $26,600 cash and signing a long-term note payable for $36,900. | ||
Jun. | 2 | The company purchased a portable building with $40,500 cash and moved it onto the land acquired on June 2. | ||
Jun. | 2 | The company paid $11,700 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 $17,800 cash. | ||
Jun. | 12 | The company purchased $37,400 of additional drafting equipment by paying $24,000 cash and signing a long-term note payable for $13,400. | ||
Jun. | 14 | The company completed $37,200 of engineering services for a client. This amount is to be received in 30 days. | ||
Jun. | 15 | The company purchased $2,600 of additional office equipment on credit. | ||
Jun. | 17 | The company completed engineering services for $27,800 on credit. | ||
Jun. | 18 | The company received a bill for rent of equipment that was used on a recently completed job. The $2,750 rent cost must be paid within 30 days. | ||
Jun. | 20 | The company collected $18,600 cash in partial payment from the client billed on June 14. | ||
Jun. | 21 | The company paid $2,000 cash for wages to a drafting assistant. | ||
Jun. | 23 | The company paid $2,600 cash to settle the account payable created on June 15. | ||
Jun. | 24 | The company paid $1,650 cash for minor maintenance of its drafting equipment. | ||
Jun. | 26 | Than Nguyen withdrew $10,060 cash from the company for personal use. | ||
Jun. | 28 | The company paid $2,000 cash for wages to a drafting assistant. | ||
Jun. | 30 | The company paid $3,660 cash for advertisements on the web during June. |
Descriptions of items that require adjusting entries on June 30,
2017, follow.
a) The company has completed, but not yet billed, $17,600 of engineering services for a client.
b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $2,300 salvage value, is $330 per month.
c) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $12,400 salvage value, is $1,900 per month.
d) Straight-line depreciation on the building, assuming a 25-year life and a $1,500 salvage value, is $130 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 $190.
g) The drafting assistant is paid $2,000 for a 5-day work week. 2 days' wages have been incurred but are unpaid as of month-end.