Journal Entries and Trial Balance Orange Realty acts as an agent in buying, selling, renting, and managing real estate. The trial balance on October 31, 20Y4, is shown next. ORANGE REALTY Trial Balance October 31, 20Y4 Debit Balances Credit Balances Cash 16,960 Accounts Receivable 34,900 Prepaid Insurance 3,600 Office Supplies 800 Land - Accounts Payable 4,960 Unearned Rent - Notes Payable - Common Stock 5,000 Retained Earnings 26,540 Dividends 12,800 Fees Earned 176,000 Salary and Commission Expense 112,000 Rent Expense 14,000 Advertising Expense 11,440 Automobile Expense 5,120 Miscellaneous Expense 880 212,500 212,500 The following business transactions were completed by Orange Realty during November 20Y4: Nov. 1 Purchased office supplies on account, $1,050. 2 Paid rent on office for month, $2,000. 3 Received cash from clients on account, $22,300. 5 Paid annual insurance premiums, $2,850. 9 Returned a portion of the office supplies purchased on November 1, receiving full credit for their cost, $200. 17 Paid advertising expense, $2,750. 23 Paid creditors on account, $2,475. 29 Paid miscellaneous expenses, $250. 30 Paid automobile expense (including rental charges for an automobile), $750. 30 Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $500. 30 Paid salaries and commissions for the month, $13,900. 30 Recorded revenue earned and billed to clients during the month, $41,500. 30 Purchased land for a future building site for $37,500, paying $5,000 in cash and giving a note payable for the remainder. 30 Paid dividends, $2,500. 30 Rented land purchased on November 30 to a local university for use as a parking lot for athletic events; received advance payment of $1,800. Required: 1. Journalize the transactions for November in a two-column journal. If an amount box does not require an entry, leave the box blank. Nov. 1 Office Supplies fill in the blank aaeec5f72fc203b_2 Accounts Payable fill in the blank aaeec5f72fc203b_4 Nov. 2 Rent Expense fill in the blank aaeec5f72fc203b_6 Cash fill in the blank aaeec5f72fc203b_8 Nov. 3 Cash fill in the blank aaeec5f72fc203b_10 Accounts Receivable fill in the blank aaeec5f72fc203b_12 Nov. 5 Prepaid Insurance fill in the blank aaeec5f72fc203b_14 Cash fill in the blank aaeec5f72fc203b_16 Nov. 9 Accounts Payable fill in the blank aaeec5f72fc203b_18 Office Supplies fill in the blank aaeec5f72fc203b_20 Nov. 17 Advertising Expense fill in the blank aaeec5f72fc203b_22 Cash fill in the blank aaeec5f72fc203b_24 Nov. 23 Accounts Payable fill in the blank aaeec5f72fc203b_26 Cash fill in the blank aaeec5f72fc203b_28 Nov. 29 Miscellaneous Expense fill in the blank aaeec5f72fc203b_30 Cash fill in the blank aaeec5f72fc203b_32 Nov. 30 Automobile Expense fill in the blank aaeec5f72fc203b_34 Cash fill in the blank aaeec5f72fc203b_36 Nov. 30 Cash fill in the blank aaeec5f72fc203b_38 Salary and Commission Expense fill in the blank aaeec5f72fc203b_40 Nov. 30 Salary and Commission Expense fill in the blank aaeec5f72fc203b_42 Cash fill in the blank aaeec5f72fc203b_44 Nov. 30 Accounts Receivable fill in the blank aaeec5f72fc203b_46 Fees Earned fill in the blank aaeec5f72fc203b_48 Nov. 30 Land fill in the blank aaeec5f72fc203b_50 fill in the blank aaeec5f72fc203b_51 Cash fill in the blank aaeec5f72fc203b_53 fill in the blank aaeec5f72fc203b_54 Notes Payable fill in the blank aaeec5f72fc203b_56 fill in the blank aaeec5f72fc203b_57 Nov. 30 Dividends fill in the blank aaeec5f72fc203b_59 Cash fill in the blank aaeec5f72fc203b_61 Nov. 30 Cash fill in the blank aaeec5f72fc203b_63 Unearned Rent fill in the blank aaeec5f72fc203b_65 2. Record the November 1, 20Y4, balance of each account in the appropriate balance column of a T account. 3. Post the journal entries to the T accounts below, selecting the date to the left of each amount to identify the transaction. Determine the balances for all accounts.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Orange Realty acts as an agent in buying, selling, renting, and managing real estate. The trial balance on October 31, 20Y4, is shown next.
ORANGE REALTY Trial Balance October 31, 20Y4 |
||||||
Debit Balances |
Credit Balances |
|||||
Cash | 16,960 | |||||
34,900 | ||||||
Prepaid Insurance | 3,600 | |||||
Office Supplies | 800 | |||||
Land | - | |||||
Accounts Payable | 4,960 | |||||
Unearned Rent | - | |||||
Notes Payable | - | |||||
Common Stock | 5,000 | |||||
26,540 | ||||||
Dividends | 12,800 | |||||
Fees Earned | 176,000 | |||||
Salary and Commission Expense | 112,000 | |||||
Rent Expense | 14,000 | |||||
Advertising Expense | 11,440 | |||||
Automobile Expense | 5,120 | |||||
Miscellaneous Expense | 880 | |||||
212,500 | 212,500 |
The following business transactions were completed by Orange Realty during November 20Y4:
Nov. | 1 | Purchased office supplies on account, $1,050. | ||
2 | Paid rent on office for month, $2,000. | |||
3 | Received cash from clients on account, $22,300. | |||
5 | Paid annual insurance premiums, $2,850. | |||
9 | Returned a portion of the office supplies purchased on November 1, receiving full credit for their cost, $200. | |||
17 | Paid advertising expense, $2,750. | |||
23 | Paid creditors on account, $2,475. | |||
29 | Paid miscellaneous expenses, $250. | |||
30 | Paid automobile expense (including rental charges for an automobile), $750. | |||
30 | Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $500. | |||
30 | Paid salaries and commissions for the month, $13,900. | |||
30 | Recorded revenue earned and billed to clients during the month, $41,500. | |||
30 | Purchased land for a future building site for $37,500, paying $5,000 in cash and giving a note payable for the remainder. | |||
30 | Paid dividends, $2,500. | |||
30 | Rented land purchased on November 30 to a local university for use as a parking lot for athletic events; received advance payment of $1,800. |
Required:
1. Journalize the transactions for November in a two-column journal. If an amount box does not require an entry, leave the box blank.
Nov. 1 | Office Supplies | fill in the blank aaeec5f72fc203b_2 | |
Accounts Payable | fill in the blank aaeec5f72fc203b_4 | ||
Nov. 2 | Rent Expense | fill in the blank aaeec5f72fc203b_6 | |
Cash | fill in the blank aaeec5f72fc203b_8 | ||
Nov. 3 | Cash | fill in the blank aaeec5f72fc203b_10 | |
Accounts Receivable | fill in the blank aaeec5f72fc203b_12 | ||
Nov. 5 | Prepaid Insurance | fill in the blank aaeec5f72fc203b_14 | |
Cash | fill in the blank aaeec5f72fc203b_16 | ||
Nov. 9 | Accounts Payable | fill in the blank aaeec5f72fc203b_18 | |
Office Supplies | fill in the blank aaeec5f72fc203b_20 | ||
Nov. 17 | Advertising Expense | fill in the blank aaeec5f72fc203b_22 | |
Cash | fill in the blank aaeec5f72fc203b_24 | ||
Nov. 23 | Accounts Payable | fill in the blank aaeec5f72fc203b_26 | |
Cash | fill in the blank aaeec5f72fc203b_28 | ||
Nov. 29 | Miscellaneous Expense | fill in the blank aaeec5f72fc203b_30 | |
Cash | fill in the blank aaeec5f72fc203b_32 | ||
Nov. 30 | Automobile Expense | fill in the blank aaeec5f72fc203b_34 | |
Cash | fill in the blank aaeec5f72fc203b_36 | ||
Nov. 30 | Cash | fill in the blank aaeec5f72fc203b_38 | |
Salary and Commission Expense | fill in the blank aaeec5f72fc203b_40 | ||
Nov. 30 | Salary and Commission Expense | fill in the blank aaeec5f72fc203b_42 | |
Cash | fill in the blank aaeec5f72fc203b_44 | ||
Nov. 30 | Accounts Receivable | fill in the blank aaeec5f72fc203b_46 | |
Fees Earned | fill in the blank aaeec5f72fc203b_48 | ||
Nov. 30 | Land | fill in the blank aaeec5f72fc203b_50 | fill in the blank aaeec5f72fc203b_51 |
Cash | fill in the blank aaeec5f72fc203b_53 | fill in the blank aaeec5f72fc203b_54 | |
Notes Payable | fill in the blank aaeec5f72fc203b_56 | fill in the blank aaeec5f72fc203b_57 | |
Nov. 30 | Dividends | fill in the blank aaeec5f72fc203b_59 | |
Cash | fill in the blank aaeec5f72fc203b_61 | ||
Nov. 30 | Cash | fill in the blank aaeec5f72fc203b_63 | |
Unearned Rent | fill in the blank aaeec5f72fc203b_65 |
2. Record the November 1, 20Y4, balance of each account in the appropriate balance column of a T account.
3.
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