ACCT504 Devry Case Study 1 (Part A) P2-69B During the first month of operations, Johnson Plumbing, Inc.

ACCT504 Devry

Case Study 1 (Part A)

P2-69B

(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 operations, Johnson Plumbing, Inc., completed the following transactions:

2-Mar Johnson received $35,000 cash and issued common stock to the stockholders.

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

4Performed services for a client and received cash, $1,400.

7Paid cash to acquire land, $24,000.

11Performed services for a customer and billed the customer, $800. Johnson expects to collect within one month.

16Paid for the equipment purchased March 3 on account.

17Paid the telephone bill, $150.

18Received partial payment from customer on account, $400.

22Paid the water and electricity bills, $170.

29Received $1,500 cash for repairing the pipes of a customer.

31Paid employee salary, $1,800.

31Declared and paid dividends of $2,100.

Requirements: (60 Points)

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 Johnson Plumbing, Inc., at March 31 of the current year.

4. The manager asks you how much in total resources the business has to work with, how much it owes, and whether March was profitable (and by how much).