Reference no: EM132020673
Case Study Part A -
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 $65,000 cash and issued common stock to the stockholders.
June 3 Purchased supplies, $3,000, and equipment, $5,200, on account.
June 4 Performed services for a client and received cash, $6,300.
June 7 Paid cash to acquire land, $37,000.
June 11 Performed services for a customer and billed the customer, $1,200. Johnson expects to collect within one month.
June 16 Paid partial for the equipment purchased June 3 on account $2,800.
June 17 Paid the telephone bill, $230.
June 18 Received partial payment from customer on account, $700.
June 22 Paid the water and electricity bills, $400.
June 29 Received $5,000 cash for repairing the pipes of a customer.
June 30 Paid employee salary, $4,300.
June 30 Declared and paid dividends of $5,000.
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 Part B -
Requirement 1 - 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, $5,100.
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.