Question

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 \(6,300 cash and signing a longterm note payable for \)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.

l. 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 \(9,480 cash in dividends.

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

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): 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). Post the journal entries from part 1 to the accounts and enter the balance after each posting.

Short answer

The total cash ledger balance amounts to $22,945.

Step-by-step solution

General Ledger (part 1)

Cash Account No. 101
Date	PR	Debit	Credit	Balance
a	G1	$ 100,000		$ 100,000
b	G1		$ 6,300	93,700
c	G1		55,000	38,700
d	G1		3,000	35,700
e	G1	6,200		41,900
f	G1		9,500	32,400
k	G2	7,000		39,400
l	G2		1,200	38,200
m	G2		1,150	37,050
n	G2		925	36,125
o	G2		9,480	26,645
P	G3		1,200	25,445
q	G3		2,500	22,945

Accounts Receivables Account No. 106
Date	PR	Debit	Credit	Balance
g	G2	$ 14,000		$ 14,000
i	G2	22,000		36,000
k	G2		7,000	29,000

Prepaid Insurance Account No. 108
Date	PR	Debit	Credit	Balance
d	G1	$ 3,000		$ 3,000

General Ledger (part 2)

Office Equipment Account No. 163
Date	PR	Debit	Credit	Balance
a	G1	$ 5,000		$ 5,000
h	G1	1,150		6,150

Drafting Equipment Account No. 164
Date	PR	Debit	Credit	Balance
a	G1	$ 60,000		$ 60,000
f	G1	20,000		80,000

Building Account No. 170
Date	PR	Debit	Credit	Balance
c	G1	$ 55,000		$ 55,000

Land Account No. 172
Date	PR	Debit	Credit	Balance
c	G1	$ 49,000		$ 49,000

Accounts Payable Account No. 201
Date	PR	Debit	Credit	Balance
h	G2		$ 1,150	$ 1,150
j	G2		1,333	2,483
m	G2	$ 1,150		1,333

Notes Payable Account No. 250
Date	PR	Debit	Credit	Balance
b	G1		$ 42,700	$ 42,700
f	G1		10,500	53,200

General Ledger (part 3)

Common Stock Account No. 307
Date	PR	Debit	Credit	Balance
a	G1		$ 165,000	$ 165,000

Dividends Account No. 319
Date	PR	Debit	Credit	Balance
o	G2	$ 9,480		$ 9,480

Engineering Fees Earned Account No. 402
Date	PR	Debit	Credit	Balance
e	G1		$ 6,200	$ 6,200
g	G1		14,000	20,200
I	G2		22,000	42,200

Wages Expenses Account No. 601
Date	PR	Debit	Credit	Balance
l	G2	$ 1,200		$ 1,200
p	G3	1,200		2,400

Equipment Rental Expense Account No. 602
Date	PR	Debit	Credit	Balance
j	G2	$ 1,333		$ 1,333

Advertising Expense Account No. 603
Date	PR	Debit	Credit	Balance
q	G3	$ 2,500		$ 2,500

General Ledger (part 4)

Repair Expense Account No. 604
Date	PR	Debit	Credit	Balance
n	G2	$ 925		$ 925