Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2016, follows:

Valley Realty

UNADJUSTED TRIAL BALANCE

August 31, 2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	52,500.00
2	Accounts Receivable	100,100.00
3	Prepaid Insurance	12,600.00
4	Office Supplies	2,800.00
5	Land
6	Accounts Payable		21,000.00
7	Unearned Rent
8	Notes Payable
9	Common Stock		17,500.00
10	Retained Earnings		70,000.00
11	Dividends	44,800.00
12	Fees Earned		591,500.00
13	Salary and Commission Expense	385,000.00
14	Rent Expense	49,000.00
15	Advertising Expense	32,200.00
16	Automobile Expense	15,750.00
17	Miscellaneous Expense	5,250.00
18	Totals	700,000.00	700,000.00

The following business transactions were completed by Valley Realty during August 2016. Enter the transactions through the 23rd on Page 18 of the two-column journal:

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 remaining transactions on Page 19 of the two-column journal:

Aug.	29	Paid miscellaneous expenses, $1,700.
	30	Paid automobile expense, $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	Land purchased on August 31 used by a local university as a parking lot during football season (September, October, and November); received advance payment of $5,000.

	Required:
1.	Record the August 1, 2016, balance of each account in the appropriate balance column of a four-column account, typeBalance in the item section, and select a check mark in the Posting Reference column.
2.	Journalize the transactions for August in a two-column journal beginning on Page 18. Refer to the Chart of Accounts for exact wording of account titles.
3.	Post to the ledger, extending the account balance to the appropriate balance column after each posting. Post in chronological order. For transactions occurring on the same day, post in the order presented in the instructions. Insert the appropriate posting references in both the journal and the ledger as each item is posted.
4.	Prepare an unadjusted trial balance of the ledger as of August 31, 2016.
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 on August 31. Use page 20. (Note: You will not be required to post this entry to the ledger at this time.) (c) Is this error a transposition or slide?

X

Journal

Shaded cells have feedback.

2. Journalize the transactions for August in a two-column journal beginning on Page 18. Refer to the Chart of Accounts for exact wording of account titles.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

PAGE 18PAGE 19

JOURNAL

Score: 176/434

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Points:

43.8 / 108

Feedback

Check My Work

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.