Passport Realty acts as an agent in buying, selling, renting, and managing real estate.
Passport Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on October 31, 2008, is shown at the top of the following page.
The following business transactions were completed by Passport Realty during November 2008:
Nov. 1. Paid rent on office for month, $5,000.
2. Purchased office supplies on account, $1,750.
5. Paid annual insurance premiums, $4,800.
10. Received cash from clients on account, $52,000.
15. Purchased land for a future building site for $90,000, paying $10,000 in cash and giving a note payable for the remainder.
17. Paid creditors on account, $7,750.
Passport Realty Unadjusted Trial Balance October 31, 2008
Debit
Credit
Balances
Balances
11
Cash
26,300
12
Accounts Receivable
67,500
13
Prepaid Insurance
3,000
14
Office Supplies
1,800
16
Land
—
21
Accounts Payable
13,020
22
Unearned Rent
—
23
Notes Payable
—
31
Ashley Carnes, Capital
32,980
32
Ashley Carnes, Drawing
2,000
41
Fees Earned
260,000
51
Salary and Commission Expense
148,200
52
Rent Expense
30,000
53
Advertising Expense
17,800
54
Automobile Expense
5,500
59
Miscellaneous Expense
3,900
306,000
306,000
Nov. 20. Returned a portion of the office supplies purchased on November 2, receiving full credit for their cost, $250.
23. Paid advertising expense, $2,100.
27. Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $700.
28. Paid automobile expense (including rental charges for an automobile), $1,500.
29. Paid miscellaneous expenses, $450.
30. Recorded revenue earned and billed to clients during the month, $48,400.
30. Paid salaries and commissions for the month, $25,000.
30. Withdrew cash for personal use, $8,000.
30. Rented land purchased on November 15 to local merchants association for use as a parking lot in December and January, during a street rebuilding program; received advance payment of $2,500.
Instructions
1. Record the November 1, 2008, 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 November in a two-column journal. 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 November 30, 2008.
