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Journal Entries and Trial Balance

On August 1, 20Y7, Rafael Masey established Planet Realty, which completed the following transactions during the month:

1. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $18,000.
2. Purchased supplies on account, $980.
3. Earned sales commissions, receiving cash, $15,120.
4. Paid rent on office and equipment for the month, $3,330.
5. Paid creditor on account, $360.
6. Paid dividends, $890.
7. Paid automobile expenses (including rental charge) for month, $920, and miscellaneous expenses, $620.
8. Paid office salaries, $1,940.
9. Determined that the cost of supplies used was $540.

Required:

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. If an amount box does not require an entry, leave it blank.

a.
b.
c.
d.
e.
f.
g.
h.
i.

2. Prepare T accounts, using the account titles in (1). Post (in chronological order) the journal entries to these accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

Cash
Bal.

Supplies
Bal.

Accounts Payable
		Bal.

Common Stock

Dividends

Sales Commissions

Rent Expense

Office Salaries Expense

Automobile Expense

Supplies Expense

Miscellaneous Expense

3. Prepare an unadjusted trial balance as of August 31, 20Y7. List all accounts in the order of Assets, Liabilities, Stockholders equity, Revenues, and Expenses. For those boxes in which no entry is required, leave the box blank.

Planet Realty
Unadjusted Trial Balance
August 31, 20Y7
	Debit Balances	Credit Balances

4. Determine the following:

a. Amount of total revenue recorded in the ledger. $

b. Amount of total expenses recorded in the ledger. $

c. Amount of net income for August. $

5. Determine the increase or decrease in retained earnings for August. $

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