Accounting 504 case study
Case Study 1 (Part A)
(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
Gordon received $55,000 cash and
issued common stock to the stockholders.
Purchased supplies, $3,000, and
equipment, $5,200, on account.
Performed services for a client
and received cash, $6,300.
Paid cash to acquire land, $37,000.
Performed services for a customer
and billed the customer, $1,200. Johnson expects to collect within one month.
Paid partial for the equipment
purchased June 3 on account $2,800.
Paid the telephone bill, $230.
Received partial payment from
customer on account, $700.
Paid the water and electricity
Received $5,000 cash for repairing
the pipes of a customer.
Paid employee salary, $4,300.
Declared and paid dividends of
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
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)
(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:
Accrued advertising revenue at June 30, $3,100.
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.
Prepare adjusted trial balance for Gordon
Construction at June 30, 20xx.
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