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.