Elite Realty Unadjusted Trial Balance March 31, 20Y3 Account No. Debit Credit Balances Balances Cash 11 26,300 Accounts Receivable.. 12 61,500 Prepaid Insurance. 13 3,000 Office Supplies. Land Accounts Payable Unearned Rent.. 14 1,800 16 21 14,000 22 Notes Payable.. 23 Common Stock. 31 10,000 Retained Earnings. 32 36,000 Dividends 33 2,000 Fees Earned.. Salary and Commission Expense. 41 240,000 51 148,200 30,000 Rent Expense Advertising Expense... Automobile Expense Miscellaneous Expense 52 53 17,800 54 5,500 59 3,900 300,000 300,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2OY3, follows:

The following business transactions were completed by Elite Realty during April 20Y3: Apr. 1. Paid rent on office for month, $6,500.
2. Purchased office supplies on account, $2300.
5. Paid insurance premiums. $6,000.
10. Received cash from clients on account, $52,300.
15. Purchased land for a future building site for $200,000, paying $30,000 in cash and giving a note payable for the remainder.
17. Paid creditors on account, $6,450.
20. Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, $325.
23. Paid advertising expense, $4300.
Enter the following transactions on Page 19 of the two-column journal:

27. Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $2300.
28. Paid automobile expense (including rental charges for an automobile), $ 1300.
29. Paid miscellaneous expenses, $ 1,400.
30. Recorded revenue earned and billed to clients during the month, $57,000.
30. Paid salaries and commissions for the month. $11,900.
30. Paid dividends, $4,000.
30. Rented land purchased on April 15 to local merchants association for use as a parking lot in May and June, during a street rebuilding program; received advance payment of $ 10,000.
Instructions
1. Record the April 1, 20Y3, 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 April in a two-column journal beginning on Page 18. 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 April 30, 20Y3
5- Assume that the April 30 transaction for salaries and commissions should have been $19,100. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry, (c) Is this error a transposition or slide?

Elite Realty
Unadjusted Trial Balance
March 31, 20Y3
Account
No.
Debit
Credit
Balances
Balances
Cash
11
26,300
Accounts Receivable..
12
61,500
Prepaid Insurance.
13
3,000
Office Supplies.
Land
Accounts Payable
Unearned Rent..
14
1,800
16
21
14,000
22
Notes Payable..
23
Common Stock.
31
10,000
Retained Earnings.
32
36,000
Dividends
33
2,000
Fees Earned..
Salary and Commission Expense.
41
240,000
51
148,200
30,000
Rent Expense
Advertising Expense...
Automobile Expense
Miscellaneous Expense
52
53
17,800
54
5,500
59
3,900
300,000
300,000
Transcribed Image Text:Elite Realty Unadjusted Trial Balance March 31, 20Y3 Account No. Debit Credit Balances Balances Cash 11 26,300 Accounts Receivable.. 12 61,500 Prepaid Insurance. 13 3,000 Office Supplies. Land Accounts Payable Unearned Rent.. 14 1,800 16 21 14,000 22 Notes Payable.. 23 Common Stock. 31 10,000 Retained Earnings. 32 36,000 Dividends 33 2,000 Fees Earned.. Salary and Commission Expense. 41 240,000 51 148,200 30,000 Rent Expense Advertising Expense... Automobile Expense Miscellaneous Expense 52 53 17,800 54 5,500 59 3,900 300,000 300,000
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