On October 1, 2018, Jay Crowley established Affordable Realty, which completed the following transactions during the month: Oct. 1 Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $40,000. 2 Paid rent on office and equipment for the month, $4,800. 3 Purchased supplies on account, $2,150. 4 Paid creditor on account, $1,100. 5 Earned sales commissions, receiving cash, $18,750. 6 Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800. 7 Paid office salaries, $3,500. 8 Determined that the cost of supplies used was $1,300. 9 Paid dividends, $1,500. 1. Journalize entries for transactions Oct. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. 2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of October 31, 2018. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for October. 5. Determine the increase or decrease in retained earnings for October. CHART OF ACCOUNTS Affordable Realty General Ledger ASSETS 11 Cash 12 Supplies LIABILITIES 21 Accounts Payable EQUITY 31 Common Stock 33 Dividends REVENUE 41 Sales Commissions EXPENSES 51 Rent Expense 52 Office Salaries Expense 53 Automobile Expense 54 Supplies Expense 55 Miscellaneous Expense

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On October 1, 2018, Jay Crowley established Affordable Realty, which completed the following transactions during the month:

Oct.	1	Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $40,000.
	2	Paid rent on office and equipment for the month, $4,800.
	3	Purchased supplies on account, $2,150.
	4	Paid creditor on account, $1,100.
	5	Earned sales commissions, receiving cash, $18,750.
	6	Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800.
	7	Paid office salaries, $3,500.
	8	Determined that the cost of supplies used was $1,300.
	9	Paid dividends, $1,500.

Journalize entries for transactions Oct. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles.

Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

Prepare an unadjusted trial balance as of October 31, 2018.

Determine the following:

	a. Amount of total revenue recorded in the ledger.
	b. Amount of total expenses recorded in the ledger.
	c. Amount of net income for October.

Determine the increase or decrease in retained earnings for October.

CHART OF ACCOUNTS

Affordable Realty

General Ledger

	ASSETS
11	Cash
12	Supplies

	LIABILITIES
21	Accounts Payable

	EQUITY
31	Common Stock
33	Dividends

	REVENUE
41	Sales Commissions

	EXPENSES
51	Rent Expense
52	Office Salaries Expense
53	Automobile Expense
54	Supplies Expense
55	Miscellaneous Expense

2. Post the joumal entries to the Taccounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after
all posting is complete. Accounts containing only a single entry do not need a balance.
Cash
Oct. 1 V
Oct. 2 V
Oct. 5 V
Oct. 4 V
Oct. 6 V
Oct. 7 V
Oct. 9 V
Bal.
Supplies
Oct. 3 V
Oct. 8 V
Bal.
Accounts Payable
Oct. 4 V
Oct. 3 V
Bal.

Common Stock
Oct. 1 V
Dividends
Oct. 9 V
Sales Commissions
Oct. 5 V
Rent Expense
Oct. 2 V
Office Salaries Expense
Oct. 7 V
Automobile Expense
Oct. 6 V
Supplies Expense
Oct. 8 V
Miscellaneous Expense
Oct. 6 V

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