Shelton Engineering completed the following transactions in the month of June.

a. Shania Shelton, the owner, invested $105,000 cash, office equipment with a value of $6,000, and $45,000 of drafting equipment to launch the business.

b. Purchased land worth $54,000 for an office by paying $5,400 cash and signing a long-term note payable for $48,600.

c. Purchased a portable building with $75,000 cash and moved it onto the land acquired in b.

d. Paid $6,000 cash for the premium on an 18-month insurance policy.

e. Completed and delivered a set of plans for a client and collected $5,700 cash.

f. Purchased $22,500 of additional drafting equipment by paying $10,500 cash and signing a longterm note payable for $12,000.

g. Completed $12,000 of engineering services for a client. This amount is to be received in 30 days.

h. Purchased $2,250 of additional office equipment on credit.

i. Completed engineering services for $18,000 on credit.

j. Received a bill for rent of equipment that was used on a recently completed job. The $1,200 rent must be paid within 30 days.

k. Collected $7,200 cash in partial payment from the client described in transaction g.

l. Paid $1,500 cash for wages to a drafting assistant.

m. Paid $2,250 cash to settle the account payable created in transaction h.

n. Paid $675 cash for minor repairs to the drafting equipment.

o. Shelton withdrew $9,360 cash for personal use.

p. Paid $1,500 cash for wages to a drafting assistant.

q. Paid $3,000 cash for advertisements in the local newspaper during June.


1. Prepare general journal entries to record these transactions (use the account titles listed in part 2).

2. Open the following 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); S. Shelton, Capital (301); S. Shelton, Withdrawals (302); 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.

3. Prepare a trial balance as of the end of this month’s operations.