Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2019, follows: Valley Realty Unadjusted Trial Balance July 31, 2019 Account No. Debit Balances Credit Balances Cash 52,500 11 Accounts Receivable 12 100,100 Prepaid Insurance. Office Supplies Land .... 13 12,600 14 2,800 16 Accounts Payable Unearned Rent. 21 21,000 22 Notes Payable... Cindy Getman, Capital Cindy Getman, Drawing Fees Earned.... Salary and Commission Expense. Rent Expense Advertising Expense.. Automobile Expense Miscellaneous Expense 23 31 87,500 32 44,800 41 591,500 51 385,000 52 49,000 53 32,200 54 15,750 59 5,250 700,000 700,000 The following business transactions were completed by Valley Realty during August 2019 1. Purchased office supplies on account, $3,150. Aug. 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 (Continued) Aug. 17. Paid advertising expense, $8,000. 23. Paid creditors on account, $13,750. Enter the following transactions on Page 19 of the two-column journal 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 park- ing lot during football season (September, October, and November); received advance payment of $5,000 Instructions 1. Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark in the Posting Reference column 2. Journalize the transactions for August in a two-column journal beginning on Page 18 Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting 4. Prepare an unadjusted trial balance of the ledger as of August 31, 2019 5. Assume that the August 31 transaction for Cindy Getman's cash withdrawal should have been $10,000. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?

Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2019, follows: Valley Realty Unadjusted Trial Balance July 31, 2019 Account No. Debit Balances Credit Balances Cash 52,500 11 Accounts Receivable 12 100,100 Prepaid Insurance. Office Supplies Land .... 13 12,600 14 2,800 16 Accounts Payable Unearned Rent. 21 21,000 22 Notes Payable... Cindy Getman, Capital Cindy Getman, Drawing Fees Earned.... Salary and Commission Expense. Rent Expense Advertising Expense.. Automobile Expense Miscellaneous Expense 23 31 87,500 32 44,800 41 591,500 51 385,000 52 49,000 53 32,200 54 15,750 59 5,250 700,000 700,000 The following business transactions were completed by Valley Realty during August 2019 1. Purchased office supplies on account, $3,150. Aug. 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 (Continued) Aug. 17. Paid advertising expense, $8,000. 23. Paid creditors on account, $13,750. Enter the following transactions on Page 19 of the two-column journal 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 park- ing lot during football season (September, October, and November); received advance payment of $5,000 Instructions 1. Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark in the Posting Reference column 2. Journalize the transactions for August in a two-column journal beginning on Page 18 Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting 4. Prepare an unadjusted trial balance of the ledger as of August 31, 2019 5. Assume that the August 31 transaction for Cindy Getman's cash withdrawal should have been $10,000. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter2: Analyzing Transactions

Section: Chapter Questions

Problem 4PA: Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted...

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