Question

1. 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
   Aug. 2
   Aug. 3
   Aug. 5
   Aug. 9
   Aug. 17
   Aug. 23

   General Journal				Page 19
   Date	Description	Post. Ref.	Debit	Credit
   20Y7
   Aug. 29
   Aug. 30
   Aug. 31-Error
   Salary
   Revenue
   Land
   Withdraw
   Rent

   3. Post to the ledger, extending the account balance to the appropriate balance column after each posting.

   4. Using the balances from the spreadsheet, prepare an unadjusted trial balance of the ledger as of August 31, 20Y7.

   If an amount box does not require an entry, leave it blank.

   Valley Realty Unadjusted Trial Balance August 31, 20Y7
   	Debit Balances	Credit Balances

   5a. Assume that the August 31 transaction for Cindy Getman's cash withdrawal should have been $10,000. As a result, the unadjusted trial balance in (4) would  

   5b. Assume that the August 31 transaction for Cindy Getman's cash withdrawal should have been $10,000. Journalize the correcting entry. If an amount box does not require an entry, leave it blank.

   General Journal				Page 19
   Date	Description	Post. Ref.	Debit	Credit
   20Y7
   Aug. 31

   5c. Assume that the August 31 transaction for Cindy Getman's cash withdrawal should have been $10,000. Is this error a transposition or slide?
   

Check My Work

Answer 1

2. and 3. JOURNAL Page 18 Description Rat. Dobit Credit Aug 1 Office Supplies Accounts Payable 3,150 21 2 Rent Expense Cash BE 7.200 7,200 11 83.900 3 Cash Accounts Receivable 83,800 S Prepaid Insurance Cash 12,000 12,000 21 400 9 Accounts Payable Omice Supplies 17 Advertising Exponse Cash 8,000 11 8.000 21 13.750 23 Accounts Payable Cash 13,750 JOURNAL Page 19 Post Ret Date Description Debit Credit 59 1,700 Aug. 29 Miscellaneous Expense Cash 1.700 54 30 Automobile Expenso Cash 2.500 2.500 31 Cash Salary and Commission Expanse 11 51 2.000 2,000 MI 31 Salary and Commission Expono Cash 53,000 53,000

12 31 Accounts Receivable Fees Earned 183,500 163.500 75.000 31 Land Cash Notes Payable 16 11 23 7.500 67,500 1.000 31 Cindy Getman, Drawing Cash 1.000 11 5,000 31 Cash Unearned Rent 1. and 3. 5.000 GENERAL LEDGER Account Cash Post Rot ALCON Balance Debit Credi Item Debt Credit Date 2014 Aue. 1 Balance 7,200 83,900 5 17 23 29 30 31 31 31 18 16 18 18 18 19 19 19 19 19 19 12,000 8.000 13,750 1,700 2.500 52,500 45,300 129,200 117,200 109,200 $5,450 93.750 91.250 93,250 40,250 32,750 31,750 36,750 53,000 7,500 1.000 31 5,000 Account Accounts Receivable Post Item Ref. ALCON Balance Debit Credit Date Debit Credit 2014 Aun 1 Balance 3 31 89,900 100, 100 16, 200 199,700 18 19 3 183,500

Prepaid Insurance Post Ref ALCON 13 Balance Debit Credit Debit Credit 2014 Aug 1 Balance 5 ✓ 18 12,000 12,600 24,600 Office Supplies Account No Balance Debis Crec Post. Met Hem Debit Credit 2014 Aug Ralance 1 9 18 18 2,800 5.950 5.550 400 Account Land ANO Post. Rel. Debit Credit Balance Debit Credit 2016 Aug. 21 19 75,000 75,000 Accounts Payable Post Account NO 21 Balance Dabit Credi Debt Credit 21,000 Hom 2014 Aug Balance 1 9 23 Uneamed Rent ✓ 18 18 3,150 400 13.750 23.750 10,000 Post Hal. Account No 22 Balance Debit Credit Debit Credit 2014 Aug 31 Account 5.000 5,000 Notes Payable Acc No Post Rat. Balance Debit Dobit Credit 2014 Aug 31 67.500 67.500

Account No 31 Balance Debit Credit Credit 87,500 Account No 32 Halance Credit Credit Account: Cindy Getman, Capital Post Date Ret Debit 2014 Aug 1 Balance Account: Cindy Gatman, Drawing Post Ret. Debit 2014 Aug 1 Balance 19 1,000 Account: Foes Earned Post Date Rel Debit 2014 Aug Balance 31 19 Account Salary and Commission Expense Post. Date Item Ref Debit 2014 Aug. 8 Balance 31 31 19 53,000 Account: Ront Expense Post Date Ret Debit 44,800 45,800 Account No 41 Balance Debit Cred Credit 183,500 591,500 775,000 Account No 51 Balance Debit Credit Credit 2.000 385.000 363.000 435,000 Account No. 52 Balance Debit Credit Credit 2014 7,200 Aug 1 Balance 2 18 Account Advertising Expense Post Date Ref 2014 Aug Halance ✓ 17 49,000 56,200 Account No Balance Crede Debit Credit Debit 32,200 40,200 8,000

Account: Automobile Expense Post. Date Ret. 2014 Aug. 1 Balance 19 Account No. 54 Balance Debit Credit Debit Credit 30 2.500 15,750 18,250 Account Miscellaneous Expense Post Date Rot 2014 Aug 1 Balance 29 19 Account No. 59 Balance Debt Credit Debit Credit 5,250 6.950 1,700 VALLEY REALTY Unadjusted Trial Balance August 31, 2014 Credit Balances Debit Balances 36,750 199,700 24,600 5,550 75,000 Cash Accounts Receivable Prepaid Insurance Office Supplies Land Accounts Payable Uneamed Rent Notes Payable Cindy Getman, Capital Cindy Getman, Drawing Fees Earned Salary and Commission Expenso Rent Expense Advertising Expense Automobile Expense Miscellaneous Expense 10,000 5,000 67,500 87.500 45,800 775,000 436,000 56,200 40,200 18,250 6,950 945,000 945,000

5. (a) The unadjusted trial balance in (4) still balances, since the debits equaled the credits in the original journal entry. (b) The correcting entry for $9,000 ($10,000 - $1,000) would be as follows: JOURNAL Page 19 Post. Ref. Description Debit Credit Date 2014 Aug 31 Cindy Getman, Drawing Cash 32 11 9,000 9,000 (c) Slide