John Doe founded Premier Construction. Operations started on October 1, 2021.
John’s son, a teenager, kept the books for the first two months. John decides that it is time
to hire a bookkeeper with formal training. He asks you to record the activity for December
and to complete the accounting cycle for the quarter ended December 31, 2021.
The trial balance as of 11/30/2021 and the detail for the Accounts Receivable account
alance is on page 2.
The December 2021 events are on page 3.
• Ellie Smith is the only employee. She is paid on the 1st of month for the pay period
ending on the last day of the prior month and on the 16th of the month for the pay
period covering the first fifteen days of the cu
1. Enter the balances as of 11/30/2021 in the general ledger.
2. Prepare journal entries to record each of the December transactions for Premier
If an event is not a transaction, write the date and “no entry needed” on the
The explanation on the journal and in the general ledger must include at a
minimum the available document reference and a name (for example Check 100;
3. Post those entries to the accounts in the ledger.
The explanation in the general ledger must include at a minimum the available
document reference and a name (for example Check 100; Ellie Smith).
4. Prepare the unadjusted trial balance at 12/31/21.
The November 30, 2021 unadjusted trial balance of Premier Construction (reflecting its
transactions for October and November of 2021) follows.
No. Account Title Debit Credit
101 Cash $ 8,296
106 Accounts Receivable 10,500
115 Other Receivables 0
126 Supplies 0
127 Prepaid Advertising 0
128 Prepaid Insurance 0
131 Prepaid Rent 4,000
163 Construction Equipment 40,000
164 Accum. Depr. -Construction Equipment $ 0
167 Office Furniture 2,000
168 Accum. Depr. - Office Furniture 0
201 Accounts Payable 0
210 Wages Payable 2,000
236 Unearned Construction Income 0
301 J. Doe-Capital 60,000
303 J. Doe-Draws 2,500
310 Income Summary 0
403 Construction Income 19,550
500 Subcontractors Expense XXXXXXXXXX
600 Advertising Expense 1,790
612 Bank Service Charges XXXXXXXXXX
622 Depreciation Expense-Construction Equipment XXXXXXXXXX
623 Depreciation Expense-Office Furniture XXXXXXXXXX
637 Insurance Expense XXXXXXXXXX,600
640 Mileage Expense XXXXXXXXXX
652 Office Expense XXXXXXXXXX,300
655 Rent Expense XXXXXXXXXX
676 Repairs and Maintenance Expense XXXXXXXXXX,700
677 Supplies Expense XXXXXXXXXX,350
684 Wages Expense XXXXXXXXXX,650
Totals $81,550 $81,550
Customer Name Account Balance
Clark $ 3,200
City of Modesto 1,700
Premier Construction had the following transactions and events in December 2021.
Dec. 1 Issued check 100 to paid Ellie Smith’s wages; $2,000.
3 Received Check 10239 for $1,700 from City of Modesto for the receivable from
November; Ref.: CR-1201
4 Purchased $2,100 of supplies on account from Specialty Materials; Ref.: SM-1204
5 City of Escalon accepted Premier’s bid of $12,000 on a proposed project. City of Escalon made a $4,000 down payment (Check 50293); Ref.: CR-1202
9 Issued check 101 to the order of Stanislaus County Tax Collector to pay for the property taxes on John Doe’s personal residence; $2,500.
15 Completed a project for Chang Inc. and received $3,800 at the time of service
(Check 1001); Ref.: CR-1203.
16 Received a bill from Ray Consulting for the work it performed on the Chang Inc.
project; Ref.: RC-1216 for $1,900.
16 Issued check 102 payable to Ellie Smith for $2,028. The check pays Ellie for ten
days of work at the rate of $200 per day and business mileage (50 miles at $0.56
19 Received a debit memo from the bank notifying Premier Construction that Chang’s
check 1001 bounced; Ref.:DM-NSF.
20 Returned $600 of supplies purchased from Specialty Materials on 12/4. Specialty
Materials issued a credit memo; Ref.: VCM-SM1204
22 Received $1,600 from Clark Co. on its receivable (Check 200); Ref.: CR-1204
25 Issued check 103 for $1,500 to A Plus Architecture as a down payment for an
28 Issued check 104 to Google Ads for next month’s advertising costs; $600.
31 Completed the work agreed to on the contract awarded on December 5. Invoiced
City of Escalon $8,000 which is the contract amount of $12,000 less the advance
payment of $4,000; Invoice 100
31 Issued check 105 to pay Specialty Materials for the balance on account.
Premier Construction_Chart of Accounts.xlsx
PREMIER CONSTRUCTION‐CHART OF ACCOUNTS
No. Account Titles
106 Accounts Receivable
115 Other Receivables
127 Prepaid Advertising
128 Prepaid Insurance
131 Prepaid Rent
163 Construction Equipment
164 Accum. Depr.‐Construction Equipment
167 Office Furniture
168 Accum. Depr.‐Office Furniture
201 Accounts Payable
210 Wages Payable
236 Unearned Construction Income
301 J. Doe‐Capital
303 J. Doe‐Draws
310 Income Summary
403 Construction Income
500 Subcontractors Expense
600 Advertising Expense
612 Bank Service Charges
622 Depr. Exp‐Construction Equipment
623 Depr. Exp‐Office Furniture
637 Insurance Expense
640 Mileage Expense
652 Office Expense
655 Rent Expense
676 Repairs and Maintenance Expense
677 Supplies Expense
684 Wages Expense