Journal Entries and Trial Balance
Valley Realty acts as an agent in buying, selling, renting, and
managing real estate. The unadjusted trial balance on July 31,
20Y7, follows:
Valley Realty | |||
Unadjusted Trial Balance | |||
July 31, 20Y7 | |||
Account No. |
Debit Balances |
Credit Balances |
|
Cash | 11 | 52,500 | |
Accounts Receivable | 12 | 100,100 | |
Prepaid Insurance | 13 | 12,600 | |
Office Supplies | 14 | 2,800 | |
Land | 16 | — | |
Accounts Payable | 21 | 21,000 | |
Unearned Rent | 22 | — | |
Notes Payable | 23 | — | |
Cindy Getman, Capital | 31 | 87,500 | |
Cindy Getman, Drawing | 32 | 44,800 | |
Fees Earned | 41 | 591,500 | |
Salary and Commission Expense | 51 | 385,000 | |
Rent Expense | 52 | 49,000 | |
Advertising Expense | 53 | 32,200 | |
Automobile Expense | 54 | 15,750 | |
Miscellaneous Expense | 59 | 5,250 | |
700,000 | 700,000 |
The following business transactions were completed by Valley
Realty during August 20Y7:
Aug. 1. | Purchased office supplies on account, $3,150. |
2. | Paid rent on office for month, $7,200. |
3. | Received cash from clients on account, $83,900. |
5. | Paid insurance premiums, $12,000. |
9. | Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $400. |
17. | Paid advertising expense, $8,000. |
23. | Paid creditors on account, $13,750. |
29. | Paid miscellaneous expenses, $1,700. |
30. | Paid automobile expense (including rental charges for an automobile), $2,500. |
31. | Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $2,000. |
31. | Paid salaries and commissions for the month, $53,000. |
31. | Recorded revenue earned and billed to clients during the month, $183,500. |
31. | Purchased land for a future building site for $75,000, paying $7,500 in cash and giving a note payable for the remainder. |
31. | Withdrew cash for personal use, $1,000. |
31. | Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of $5,000. |
Required:
Use the attached spreadsheet to complete parts 1 and 3. Click on the Spreadsheet icon to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.
1. The August 1, 20Y7 balance of each account has been recorded in the appropriate balance column of the four-column account. The word Balance has been entered in the item section and a check mark (√) has been placed in the Posting Reference column.
2. Journalize and insert the posting reference for the transactions for August in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank.
General Journal | Page 18 | |||
---|---|---|---|---|
Date | Description | Post. Ref. | Debit | Credit |
20Y7 | ||||
Aug. 1 | Office Supplies | |||
Accounts Payable | ||||
Aug. 2 | Rent Expense | |||
Cash | ||||
Aug. 3 | Cash | |||
Accounts Receivable | ||||
Aug. 5 | Prepaid Insurance | |||
Cash | ||||
Aug. 9 | Accounts Payable | |||
Office Supplies | ||||
Aug. 17 | Advertising Expense | |||
Cash | ||||
Aug. 23 | Accounts Payable | |||
Cash |
General Journal | Page 19 | |||
---|---|---|---|---|
Date | Description | Post. Ref. | Debit | Credit |
20Y7 | ||||
Aug. 29 | Miscellaneous Expense | |||
Cash | ||||
Aug. 30 | Automobile Expense | |||
Cash | ||||
Aug. 31-Error | Cash | |||
Salary and Commission Expense | ||||
Salary | Salary and Commission Expense | |||
Cash | ||||
Revenue | Accounts Receivable | |||
Fees Earned | ||||
Land | Land | |||
Cash | ||||
Notes Payable | ||||
Withdraw | Cindy Getman, Drawing | |||
Cash | ||||
Rent | Cash | |||
Unearned Rent |
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