This comprehensive review problem requires you to complete the accounting cycle for Sousa Realty twice. This practice set allows you to review Chapters 1-5 while reinforcing the relationships between all parts of the accounting cycle. By completing two cycles, you will see how the ending September balances in the ledger are used to accumulate data in October.

First, look at the chart of accounts for Sousa Realty.

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

Required Work for September
1. Journalize transactions and post to ledger accounts.
2. Prepare a trial balance in the first two columns of the worksheet and complete the worksheet using the following 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 (p. 3 of journal).
5. Prepare a post-closing trial balance.

During October, Sousa Realty completed these transactions:

Required Work for October
1. Journalize transactions in a general journal (p. 4) and post to ledger accounts.
2. Prepare a trial balance in the first two columns of a blank, fold-out worksheet located at the end of your textbook and complete the worksheet using the following adjustment data:

a. One month’s rent had expired. Paid 5 months’ rent in advance on September 1, $1,000
b. An inventory shows $130 of office supplies remaining.
c. Depreciation on office equipment, $160.
d. Depreciation on automobile, $210.

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 (p. 6 of journal).
5. Prepare a post-closing trial balance.