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, 20Y8, follows: The following business transactions were completed by Valley Realty during August 20Y8: 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. 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. Paid dividends, $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. 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, 20Y8. 5. Assume that the August 31 transaction for dividends 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?

BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter 2, Problem 4PB
Textbook Problem

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, 20Y8, follows:

Chapter 2, Problem 4PB, Journal entries and trial balance Valley Realty acts as an agent in buying, selling, renting, and

The following business transactions were completed by Valley Realty during August 20Y8:

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.

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. Paid dividends, $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.

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, 20Y8.

5. Assume that the August 31 transaction for dividends 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?

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Chapter 2 Solutions

Financial And Managerial Accounting
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