Fundamental Accounting Principles
Fundamental Accounting Principles
23rd Edition
ISBN: 9781259536359
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
Question
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Chapter 2, Problem 2APSA
To determine

Concept Introduction

Journal Entry: The journal entries are accounting entries made in a chronological order in the general ledger to record business transactions. Journal entries are logged with the debit amounts and credit amounts with their respective dates and account names.

T Account: A T-account is the graphical representation of a general ledger that records business transactions. A T-Account looks like the letter T, where the debit entries are recorded at the left side, the credit entries are recorded on the right side and the account title is at the top.

Trial Balance: The Trial Balance is a list of closing balance of all ledger accounts on a particular date. It is a summary of all T-Account balances in the ledger and the total of debit and credit balances should always match.

1.

To Prepare: The journal entries for the transactions given for Aracel Engineering.

Expert Solution
Check Mark

Explanation of Solution

The journal entries for the transactions given are prepared as below for Aracel Engineering.

Date Account Debit ($) Credit (S)
a Cash 100,000  
  Office Equipment 5,000  
  Drafting Equipment 60,000  
  J. Arcel, Capital   165,000
       
b Land 49,000  
  Cash   6,300
  Note Payable   42,700
       
c Building 55,000  
  Cash   55,000
       
d Prepaid Insurance 3,000  
  Cash   3,000
       
e Cash 4,000  
  Engineering Fee Earned   4,000
       
f Drafting Equipment 20,000  
  Cash   5,900
  Note Payable   10,500
       
g Account Receivable 14,000  
  Engineering Fee Earned   14,000
       
h Office Equipment 1,150  
  Account Payable   1,150
       
i Account Receivable 22,000  
  Engineering Fee Earned   22,000
       
j Equipment Rental Expenses 1,333  
  Account Payable   1,333
       
k Cash 7,000  
  Account receivable   7,000
       
l Wages Expenses 1,200  
  Cash   1,200
       
m Account Payable 1,150  
  Cash   1,150
       
n Repairs Expenses 925  
  Cash   925
       
o J. Arcel, Withdrawals 9,480  
  Cash   9,480
       
p Wages Expenses 1,200  
  Cash   1,200
       
q Advertising Expenses 2,500  
  Cash   2,500

2.

To determine

To Prepare: The T-accounts for the transactions given for Aracel Engineering.

Expert Solution
Check Mark

Explanation of Solution

T-accounts prepared as below for Aracel Engineering.

Cash Account (101)
Debit Amount ($) Credit Amount ($)
J. Arcel, Capital 100,000 Land 6,300
Engineering Fee Earned 6,200 Building 55,000
Account receivable 7,000 Prepaid Insurance 3,000
    Drafting Equipment 9,500
    Wages Expenses 1,200
    Account Payable 1,150
    Repairs Expenses 925
    J. Arcel, Withdrawals 9,480
    Wages Expenses 1,200
    Advertising Expenses 2,500
Closing Balance 22,945    
Account receivable Account (106)
Debit Amount ($) Credit Amount ($)
Engineering Fee Earned 14,000 Cash 7,000
Engineering Fee Earned 22,000    
       
Closing Balance 29,000    
Prepaid Insurance Account (108)
Debit Amount ($) Credit Amount ($)
Cash 3,000    
       
Closing Balance 3,000    
Office Equipment Account (164)
Debit Amount ($) Credit Amount ($)
J. Arcel, Capital 5,000    
Account Payable 1,150    
       
Closing Balance 6,150    
Drafting Equipment Account (163)
Debit Amount ($) Credit Amount ($)
J. Arcel, Capital 60,000    
Cash 9,500    
Note Payable 10,500    
Closing Balance 80,000    
Building Account (163)
Debit Amount ($) Credit Amount ($)
Cash 55,000    
       
Closing Balance 55,000    
Land Account (163)
Debit Amount ($) Credit Amount ($)
Cash 6,300    
Note Payable 42,700    
       
Closing Balance 49,000    
Account Payable Account (201)
Debit Amount ($) Credit Amount ($)
Cash 1,150 Office Equipment 1,150
    Equipment Rental Expenses 1,333
    Closing Balance 1,333
Notes Payable Account (250)
Debit Amount ($) Credit Amount ($)
Cash 11,600 Land 42,700
    Drafting Equipment 10,500
    Closing Balance 53,200
J. Arcel, Capital Account (301)
Debit Amount ($) Credit Amount ($)
    Cash 100,000
    Office Equipment 5,000
    Drafting Equipment 60,000
    Closing Balance 165,000
J. Arcel, Withdrawals Account (302)
Debit Amount ($) Credit Amount ($)
Cash 9,480    
Closing Balance 9,480    
Engineering Fee Earned Account (402)
Debit Amount ($) Credit Amount ($)
    Cash 6,200
    Account receivable 14,000
    Account receivable 22,000
    Closing Balance 42,200
Wages Expenses Account (601)
Debit Amount ($) Credit Amount ($)
Cash 1,200    
Cash 1,200    
Closing Balance 2,400    
Equipment Rental Expenses Account (602)
Debit Amount ($) Credit Amount ($)
Account Payable 1,333    
       
Closing Balance 1,333    
Advertising Expenses Account (603)
Debit Amount ($) Credit Amount ($)
Cash 2,500    
       
Closing Balance 2,500    
Repair Expenses Account (604)
Debit Amount ($) Credit Amount ($)
Cash 925    
       
Closing Balance 925    

3.

To determine

To Prepare: The trial balance for the transactions given for Aracel Engineering as of April 30.

Expert Solution
Check Mark

Explanation of Solution

The trail balance prepared as below for Aracel Engineering.

Aracel Engineering
Trail balance as on June 30
Account Debit ($) Credit ($)
Cash 22,945  
Account receivable 29,000  
Prepaid Insurance 3,000  
Office Equipment 6,150  
Drafting Equipment 80,000  
Building 55,000  
Land 49,000  
Account Payable   1,333
Notes Payable   53,200
J. Arcel, Capital   165,000
J. Arcel, Withdrawals 9,480  
Engineering Fee Earned   42,200
Wages Expenses 2,400  
Equipment Rental Expenses 1,333  
Adverting Expenses 2,500  
Repair Expenses 925  
     
Total 261,733 261,733

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Chapter 2 Solutions

Fundamental Accounting Principles

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