Question

Sousa Realty

Review the accounting cycle twice

Make a chart of account for Sousa Realty

Assets

111 cash                                                                                                               Revenue

112 accounts receivable                                                                                                411 Commission Earned

114 prepaid rent                                                                                               Expenses            

115 office equipment                                                                                     511 Rent Expense

121 office supplies                                                                                           512 Salaries expense

122 accumulated depreciation, office equipment                              513 Gas Expense

123 automobile                                                                                                 514 Repairs Expense

124 accumulated depreciation, automobile                                          515 Telephone Expense

Liabilities                                                                                                              516 Advertising Expense

211 accounts payable                                                                                     517 Office Supplies Expense

212 salaries payable                                                                                        518 Depreciation Expense, Office equip

Owner’s equity                                                                                                 519 Depreciation expense, automobile

311 James Sousa, Capital                                                                              524 Miscellaneous Expense

312 James Sousa, Withdrawals

313 Income summary

On September 1, 201x James Sousa opened a real estate office called Sousa Realty. The following transactions were completed for the month of September.

September 1, James Sousa invested $12000 cash in the real estate agency along with $5000 of office supplies.

September 1, rented and paid 5 months, rent in advance to Murray Property Management $1000

September 1, bought an automobile on account from Hyundai North $19000

September 4 Purchased office supplies from paper company for cash $600

September 5 purchased additional office supplies from paper company, on account $250

September 6, sold a house to Hue and collected a $11000 commission.

September 8, paid gas bill to Haffner gas go $45

September 15 paid Rosie, office secretary $300

September 17 sold a building lot to tropical and earned a commission $10000: payment to be received on October 6.

September 20, James Sousa withdrew $4000 from the business to pay personal expenses.

September 21 sold a house to Suzanne and collected $7000 commission.

September 22 paid gas bill $80

September 24 paid Hyundia North $800 to repair automobile

September 30 paid Rosie, office secretary $300

September 30 paid Comcast September telephone bill $330

September 30 received advertising bill September $900 from Chicago times, the bill is to be paid on October 2

Required work for September

1 Journalize transaction and post to the ledger accounts.

2 prepare a trial balance in the first two columns of the worksheet and complete the worksheet using the fallowing adjustment data:

A. one month’s rent had expired.

B. an inventory shows $100 of office supplies remaining

C. depreciation on office equipment $160

D. depreciation on automobile $210

3 prepare a September income statement, statement of owner’s equity, and balance sheet

4 from the worksheet, journalize and post adjusting and closing entries.

5 prepare a post closing trial balance.

During October, Sousa Realty completed these transactions.

October 1 purchased additional supplies on account from paper co. $850

October 2 paid Chicago times advertising bill for September $900 Chicago times

October 3 sold a house to Helen and collected a commission of $7300

October 6 paid gas bill to Heffner gas co, $29

October 8 collected commission from tropic for sale building lot on September 17 $10000

October 12 paid $530 to long realtor’s assoc. to send employees to realtor’s workshop

Oct. 15 paid Rosie, office secretary $300

Oct. 17 sold a house to Gary and earned a commission of $2900. Commission to be received on November 10

Oct. 18 sold a building lot to Lombardi and collected a commission of $4500

Oct. 22 sent a check to heritage for $65 to help sponsor local road race (this amount is not considered an advertising expense, it is a business expense and is posted to miscellaneous expense)

Oct. 24 paid Hyundai North $620 for repairs to automobile due to accident.

Oct. 28 James Sousa withdrew $2200 from the business to pay personal expenses.

Oct. 30 paid Rosie, Office secretary $300

Oct. 30 paid Comcast telephone bill $480

Oct. 30 advertising bill from Chicago times for October $1300. The bill is to be paid on November 2.

Required work for October.

1 journalize transactions in a general journal and post to ledger accounts.

2 prepare a trial balance in the first two columns of a blank fold-out worksheet

A one month’s rent had expired. Paid 5 months rent in advance on September 1,$1000

b. an inventory shows $130 of office supplies remaining.

3 prepare an October income statement, statement of owner’s equity and balance sheet.

4 from the worksheet journalize and post adjusting and closing entries.

5 prepare a post closing trial balance.

This criterion is linked to a Learning Outcome2. Oct Worksheet		31.0 pts
This criterion is linked to a Learning Outcome3a. Oct Income Statement, Net Income $9686		12.0 pts
This criterion is linked to a Learning Outcome3b. Oct Statement of Owner's Equity, Capital $44411		5.0 pts
This criterion is linked to a Learning Outcome3c. Oct Balance Sheet, Total Assets $65811		15.0 pts
This criterion is linked to a Learning Outcome4. Journalize & Post Adjusting and Closing Entries for Oct		50.0 pts
This criterion is linked to a Learning Outcome5. Oct Post Closing Trial Balance $66551		12.0 pts

Answer 1

EXPLANATION --- JOURNAL ENTRIES FOR THE SEPTEMBER MONTH ---

Date Account Titles and Description Debit Credit 1-Sep Cash 12000 Office Equipment 5000 James Sousa, Capital 17000 Invested in real estate agency and office equipment 1 Prepaid rent 1000 Cash 1000 Rented & prepaid 5 months to Murray Property 1 Automobile 19000 Accounts Payable 19000 Purchased automobile from Hyundai North on acct 4 Office supplies 600 Cash 600 Purchased office supplies from Paper Company 5 Office Supplies 250 Accounts Payable 250 Purchased additional offices suppies on account 6 Cash 11000 Commissions earned 11000 Collected commissions on house sold to Hue 8 Gas expenses 45 Cash 45 Paid gas bill for Haffner Gas Co. 15 Salaries expenses 300 cash 300 Paid office secretary salary, Rosie Pertillo 17 Accounts receivable 10000 Commissions earned 10000 Sold building to Tropic Developers, pmt to be received Oct 8 20 James Sousa, Withdrawals 4000 Cash 4000 James Sousa withdrew money for personal expenses 21 Cash 7000 Comissions earned 7000 Collected commissions on house sold to Suzanne Horngam 22 Gas expenses 80 Cash 80 Paid gas bill to Haffner Gas Co. 24 Repairs Expenses 800 Cash 800 Paid Hyundai North for automobile repairs 30 Salaries Expenses 300 Cash 300 Paid office secretary salary, Rosie Pertillo 30 Telephone Expenses 330 Cash 330 Paid Comcast Telephone bill 30 Advertising expenses 900 Accounts payable 900 Advertising bill for Sept. to be paid Oct 2 30 Rent expenses 200 Prepaid rent 200 Adjustment for one month rent used 30 Office supplies expenses 750 Office supplies 750 Adjustment for used supplies 30 Depreciation Expense - Office Equipment 160 Accum. Depreciation - Office Equipment 160 Adjustment for depreciation 30 Depreciation Expense - Automobile 210 Accum. Depreciation - Automobile 210 Adjustment for depreciation 30 Commissions Earned 28000 Income Summary 28000 Closed Revenues to Income Summary 30 Income Summary 4075 Rent expenses 200 salary expenses 600 gas expense 125 repairs expense 800 telephone expense 330 advertising expense 900 office supplies expense 750 Depreciation Expense - Office Equipment 160 Depreciation Expense - Automobile 210 Closed Expenses to Income Summary 30 Income Summary 23925 James Sousa, Capital 23925 Closing Income summary to Capital 30 James Sousa, Capital 4000 James Sousa, Withdrawal 4000 Close withdrawals to captial