Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 20Y8, is shown below. Valley Realty Unadjusted Trial Balance July 31, 20Y8 Account No. Debit Balances Credit Balances Cash 11 9,370 Accounts Receivable 12 21,830 Prepaid Insurance 13 1,070 Office Supplies 14 640 Land 16 — Accounts Payable 21 6,180 Unearned Rent 22 — Notes Payable 23 — Common Stock 31 10,000 Retained Earnings 32 10,200 Dividends 33 750 Fees Earned 41 106,500 Salary and Commission Expense 51 78,990 Rent Expense 52 10,650 Advertising Expense 53 6,280 Automobile Expense 54 1,920 Miscellaneous Expense 59 1,380 132,880 132,880 The following business transactions were completed by Valley Realty during August 20Y8: Aug. 1. Purchased office supplies on account, $970. 2. Paid rent on office for month, $3,710. 3. Received cash from clients on account, $18,560. 5. Paid insurance premiums, $2,670. 9. Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $150. 17. Paid advertising expense, $1,480. 23. Paid creditors on account, $3,340. 29. Paid miscellaneous expense, $330. 30. Paid automobile expense (including rental charges for an automobile), $1,110. 31. Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $740. 31. Paid salaries and commissions for the month, $6,570. 31. Recorded revenue earned and billed to clients during the month, $22,270. 31. Purchased land for a future building site for $66,800, paying $7,300 in cash and giving a note payable for the remainder. 31. Paid dividends, $740. 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 $2,230. 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. Record the August 1, 20Y8 balance of each account 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 References for the transactions for August in a two-column journal beginning on Page 18. For a compound transaction, if an amount box does not require an entry, leave it blank. General Journal Page 18 Date Description Post. Ref. Debit Credit 20Y8 Aug. 1 Office Supplies 14 970 Accounts Payable 21 970 Aug. 2 Rent Expense 52 3710 Cash 11 3710 Aug. 3 Cash 11 18560 Accounts Receivable 12 18560 Aug. 5 Prepaid Insurance Cash Aug. 9 Accounts Payable Office Supplies Aug. 17 Advertising Expense Cash Aug. 23 Accounts Payable Cash General Journal Page 19 Date Description Post. Ref. Debit Credit 20Y8 Aug. 29 Miscellaneous Expense Cash Aug. 30 Automobile Expense Cash Aug. 31-Error Cash Salary and Commission Expense Aug. 31-Salary Salary and Commission Expense Cash Aug. 31-Revenue Accounts Receivable Fees Earned Aug. 31-Land Land Cash Notes Payable Aug. 31-Dividends Dividends Cash Aug. 31-Rent Cash Unearned Rent Feedback 1. The ending balance for accounts on July 31 will be the beginning balance for August 1. 2. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries. Required: 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, 20Y8. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank. Valley Realty Unadjusted Trial Balance August 31, 20Y8 Account No. Debit Balances Credit Balances Cash 5a. Assume that the August 31 transaction for dividends should have been $5,670. As a result, the unadjusted trial balance in (4) would still balance. 5b. Assume that the August 31 transaction for dividends should have been $5,670. 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 20Y8 Aug. 31 5c. Assume that the August 31 transaction for dividends should have been $5,670. 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, 20Y8, is shown below. Valley Realty Unadjusted Trial Balance July 31, 20Y8 Account No. Debit Balances Credit Balances Cash 11 9,370 Accounts Receivable 12 21,830 Prepaid Insurance 13 1,070 Office Supplies 14 640 Land 16 — Accounts Payable 21 6,180 Unearned Rent 22 — Notes Payable 23 — Common Stock 31 10,000 Retained Earnings 32 10,200 Dividends 33 750 Fees Earned 41 106,500 Salary and Commission Expense 51 78,990 Rent Expense 52 10,650 Advertising Expense 53 6,280 Automobile Expense 54 1,920 Miscellaneous Expense 59 1,380 132,880 132,880 The following business transactions were completed by Valley Realty during August 20Y8: Aug. 1. Purchased office supplies on account, $970. 2. Paid rent on office for month, $3,710. 3. Received cash from clients on account, $18,560. 5. Paid insurance premiums, $2,670. 9. Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $150. 17. Paid advertising expense, $1,480. 23. Paid creditors on account, $3,340. 29. Paid miscellaneous expense, $330. 30. Paid automobile expense (including rental charges for an automobile), $1,110. 31. Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $740. 31. Paid salaries and commissions for the month, $6,570. 31. Recorded revenue earned and billed to clients during the month, $22,270. 31. Purchased land for a future building site for $66,800, paying $7,300 in cash and giving a note payable for the remainder. 31. Paid dividends, $740. 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 $2,230. 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. Record the August 1, 20Y8 balance of each account 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 References for the transactions for August in a two-column journal beginning on Page 18. For a compound transaction, if an amount box does not require an entry, leave it blank. General Journal Page 18 Date Description Post. Ref. Debit Credit 20Y8 Aug. 1 Office Supplies 14 970 Accounts Payable 21 970 Aug. 2 Rent Expense 52 3710 Cash 11 3710 Aug. 3 Cash 11 18560 Accounts Receivable 12 18560 Aug. 5 Prepaid Insurance Cash Aug. 9 Accounts Payable Office Supplies Aug. 17 Advertising Expense Cash Aug. 23 Accounts Payable Cash General Journal Page 19 Date Description Post. Ref. Debit Credit 20Y8 Aug. 29 Miscellaneous Expense Cash Aug. 30 Automobile Expense Cash Aug. 31-Error Cash Salary and Commission Expense Aug. 31-Salary Salary and Commission Expense Cash Aug. 31-Revenue Accounts Receivable Fees Earned Aug. 31-Land Land Cash Notes Payable Aug. 31-Dividends Dividends Cash Aug. 31-Rent Cash Unearned Rent Feedback 1. The ending balance for accounts on July 31 will be the beginning balance for August 1. 2. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries. Required: 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, 20Y8. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank. Valley Realty Unadjusted Trial Balance August 31, 20Y8 Account No. Debit Balances Credit Balances Cash 5a. Assume that the August 31 transaction for dividends should have been $5,670. As a result, the unadjusted trial balance in (4) would still balance. 5b. Assume that the August 31 transaction for dividends should have been $5,670. 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 20Y8 Aug. 31 5c. Assume that the August 31 transaction for dividends should have been $5,670. Is this error a transposition or slide?

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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Question

Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 20Y8, is shown below.

Valley Realty
Unadjusted Trial Balance
July 31, 20Y8
		Account No.	Debit Balances	Credit Balances
	Cash	11	9,370
	Accounts Receivable	12	21,830
	Prepaid Insurance	13	1,070
	Office Supplies	14	640
	Land	16	—
	Accounts Payable	21		6,180
	Unearned Rent	22		—
	Notes Payable	23		—
	Common Stock	31		10,000
	Retained Earnings	32		10,200
	Dividends	33	750
	Fees Earned	41		106,500
	Salary and Commission Expense	51	78,990
	Rent Expense	52	10,650
	Advertising Expense	53	6,280
	Automobile Expense	54	1,920
	Miscellaneous Expense	59	1,380
			132,880	132,880

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

Aug. 1.	Purchased office supplies on account, $970.
2.	Paid rent on office for month, $3,710.
3.	Received cash from clients on account, $18,560.
5.	Paid insurance premiums, $2,670.
9.	Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $150.
17.	Paid advertising expense, $1,480.
23.	Paid creditors on account, $3,340.

29.	Paid miscellaneous expense, $330.
30.	Paid automobile expense (including rental charges for an automobile), $1,110.
31.	Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $740.
31.	Paid salaries and commissions for the month, $6,570.
31.	Recorded revenue earned and billed to clients during the month, $22,270.
31.	Purchased land for a future building site for $66,800, paying $7,300 in cash and giving a note payable for the remainder.
31.	Paid dividends, $740.
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 $2,230.

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. Record the August 1, 20Y8 balance of each account 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 References for the transactions for August in a two-column journal beginning on Page 18. For a compound transaction, if an amount box does not require an entry, leave it blank.

General Journal	Page 18
Date	Description	Post. Ref.	Debit	Credit
20Y8
Aug. 1	Office Supplies	14	970
	Accounts Payable	21		970
Aug. 2	Rent Expense	52	3710
	Cash	11		3710
Aug. 3	Cash	11	18560
	Accounts Receivable	12		18560
Aug. 5	Prepaid Insurance
	Cash
Aug. 9	Accounts Payable
	Office Supplies
Aug. 17	Advertising Expense
	Cash
Aug. 23	Accounts Payable
	Cash

General Journal	Page 19
Date	Description	Post. Ref.	Debit	Credit
20Y8
Aug. 29	Miscellaneous Expense
	Cash
Aug. 30	Automobile Expense
	Cash
Aug. 31-Error	Cash
	Salary and Commission Expense
Aug. 31-Salary	Salary and Commission Expense
	Cash
Aug. 31-Revenue	Accounts Receivable
	Fees Earned
Aug. 31-Land	Land
	Cash
	Notes Payable
Aug. 31-Dividends	Dividends
	Cash
Aug. 31-Rent	Cash
	Unearned Rent

Feedback

1. The ending balance for accounts on July 31 will be the beginning balance for August 1.

2. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries.

Required:

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, 20Y8.

List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank.

Valley Realty Unadjusted Trial Balance August 31, 20Y8
	Account No.	Debit Balances	Credit Balances
Cash

5a. Assume that the August 31 transaction for dividends should have been $5,670. As a result, the unadjusted trial balance in (4) would still balance.

5b. Assume that the August 31 transaction for dividends should have been $5,670. 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
20Y8
Aug. 31

5c. Assume that the August 31 transaction for dividends should have been $5,670. Is this error a transposition or slide?

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