For the following Accounting Equation, please complete the following: Journals General Ledger Trial Balance Financial Statements Profit
Question:
For the following Accounting Equation, please complete the following:
Journals
General Ledger
Trial Balance
Financial Statements
Profit & Loss
Balance Sheet
Tom’s Real Estate Company opened its doors in May 2014 in the sunny state of Florida. Tom has
always dreamed of owning a large business and believes Real Estate is the key to his future success. Over the years, he has met with high level teams across the nation and has been mentored by some of the greatest teams around. Tom has found a building to rent, along with multiple talented people to help run his business. In his first month, Tom sold 6 closings for a whopping Gross Income of $30,000.00. Of course at the end of the month, the bank balance was a lot less than he anticipated. Please help Tom figure out his net income and what his company is worth.
Tom invested $15,000.00 of personal money into his business on May 1st, 2014.
He used $3,000.00 to purchase Computers & Other Equipment for the business from
Best Buy.
Received Commission checks of $9,000.00 on May 7th.
10% of Tom’s Commissions were paid to his Agent, Tim Jones on May 8th.
His rent, paid on May 15th to Chase Bank was for $650.00. $200.00 of which is a
refundable security deposit.
Check 1322, in the amount of $32.00 was written on May 16th for the Internet Bill to
Century Link.
Salaries were paid to 1099 Vendors & Support Staff via ADP on May 16th. Payroll Journal
attached. Employee Withholdings will be paid next month, along with the IRA. Payroll
Processing Fees were $85.00.
Employer Payroll Taxes were deducted on May 16th.
Received Commission checks in the amount of $18,000.00 on May 20th.
20% of Tom’s Commissions were paid to his Agent, Tim Jones on May 21st.
$2,000.00 worth of Advertising Expenses were spent on May 25th on the Company
Credit Card. He paid XYZ Marketing Company.
Received Commission checks in the amount of $3,000.00 on May 27th.
Tom loaned one of his agents, Tim Jones, $1,500.00 on May 27th.
A payment of $200.00 was made on the Company Credit Card May 30th.
Possible G/L Categories
Bank
Pre-Paid Legal
Pre-Paid Insurance
Cost of Goods Sold Commission Income Advertising Expense Security Deposit Furnishings & Equipment Computer & Internet Loan Payable
Loan Receivable
Credit Card
Payroll Processing Fees Lead Generation
Salary Expense
Payroll Taxes
Payroll Taxes Payable IRA Payable
IRA Match
Rent
Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany