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
transactions:




June
2


Gordon received $55,000 cash and
issued common stock to the stockholders.




3


Purchased supplies, $3,000, and
equipment, $5,200, on account.




4


Performed services for a client
and received cash, $6,300.




7


Paid cash to acquire land, $37,000.




11


Performed services for a customer
and billed the customer, $1,200. Johnson expects to collect within one month.




16


Paid partial for the equipment
purchased June 3 on account $2,800.




17


Paid the telephone bill, $230.




18


Received partial payment from
customer on account, $700.




22


Paid the water and electricity
bills, $400.




29


Received $5,000 cash for repairing
the pipes of a customer.




30


Paid employee salary, $4,300.




30


Declared and paid dividends of
$3,000.




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 1 (Part B)

 

Requirement 1

(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:

  • a.
    Accrued advertising revenue at June 30, $3,100.
  • 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.

 

 



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