Question

Journal Entries and Trial Balance

Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2019, follows:

Elite Realty
Unadjusted Trial Balance
March 31, 2019
Account No.		Debit Balances	Credit Balances
11	Cash	9,880
12	Accounts Receivable	23,020
13	Prepaid Insurance	1,120
14	Office Supplies	670
16	Land	—
21	Accounts Payable		6,510
22	Unearned Rent		—
23	Notes Payable		—
31	Lester Wagner, Capital		20,200
32	Lester Wagner, Drawing	790
41	Fees Earned		112,290
51	Salary and Commission Expense	82,180
52	Rent Expense	11,230
53	Advertising Expense	6,630
54	Automobile Expense	2,020
59	Miscellaneous Expense	1,460
		139,000	139,000

The following business transactions were completed by Elite Realty during April 2019:

Apr. 1.	Paid rent on office for month, $3,730.
2.	Purchased office supplies on account, $970.
5.	Paid insurance premiums, $2,690.
10.	Received cash from clients on account, $18,650.
15.	Purchased land for a future building site for $67,100, paying $7,400 in cash
	and giving a note payable for the remainder.
17.	Paid creditors on account, $3,360.
20.	Returned a portion of the office supplies purchased on April 2, receiving
	full credit for their cost, $150.
23.	Paid advertising expense, $1,490.
Enter the following transactions on Page 19 of the two-column journal.
27.	Discovered an error in computing a commission; received cash from the sales person
	for the overpayment, $750.
28.	Paid automobile expense (including rental charges for an automobile), $1,120.
29.	Paid miscellaneous expenses, $340.
30.	Recorded revenue earned and billed to clients during the month, $22,380.
30.	Paid salaries and commissions for the month, $7,530.
30.	Withdrew cash for personal use, $750.
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 $2,240.

Required: 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Using the balances from the spreadsheet, prepare an unadjusted trial balance of the ledger as of April 30, 2019. If an amount box does not require an entry, leave it blank. Elite Realty Unadjusted Trial Balance April 30, 2019 Debit Balances Credit Balances Cash Accounts Receivable Prepaid Insurance Office Supplies Land Accounts Payable Unearned Rent Notes Payable Lester Wagner, Capital Lester Wagner, Drawing Fees Earned Salary and Commission Expense Rent Expense Advertising Expense Automobile Expense Miscellaneous Expense 5a. Assume that the April 30 transaction for salaries and commissions should have been $5,730. As a result, the unadjusted trial balance in (4) would not be impacted at all. 5b. Assume that the April 30 transaction for salaries and commissions should have been $5,730. Journalize the correcting entry. If an amount box does not require an entry, leave it blank. General Journal PAGE 19 Date Description Post. Ref. Debit Credit 2019 Apr. 30 Cash Lester Wagner, Drawing 5c. Assume that the April 30 transaction for salaries and commissions should have been $5,730. Is this error a transposition or slide?		—

Answer 1

Elite Realty
Unadjusted Trial Balance
April 30, 2019
Account		Debit	Credit
No.		Balances	Balances
11	Cash	4,940
12	Accounts Receivable	26,750
13	Prepaid Insurance	1,120
14	Office Supplies	1,490
16	Land	67100
21	Accounts Payable		3,970
22	Unearned Rent		2240
23	Notes Payable		59700
31	Lester Wagner, Capital		20,200
32	Lester Wagner, Drawing	1540
41	Fees Earned		134,670
51	Salary and Commission Expense	88,960
52	Rent Expense	14,960
53	Advertising Expense	6,630
54	Automobile Expense	3,140
59	Miscellaneous Expense	4,150
		139,000	139,000
		Cash
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	Balance b/f	11	9,880	1/4/2019	Rent	52	3730
10/4/2019	Accounts Receivable	12	18650
27/04/2019	commission	51	750	5/4/2019	Miscellaneous Expense ( Insurance)	59	2690
30/04/2019	Unearned Rent	22	2240	15/04/2019	Land	16	7400
				17/04/2019	Accounts Payable	21	3360
				29/04/2019	Automobile Expenses	54	1120
				30/04/2019	Salary and commission expenses	51	7530
				30/04/2019	Lester Wagner, Drawing	32	750
				30/04/2019	Balance c/d	11	4,940
			31520				31520
		Accounts Receivable
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	12	23,020	10/4/2019	Cash	11	18650
30/04/2019	Fees Earned	41	22,380	30/04/2019	Balance c/d	12	26,750
			45,400				45,400
		Prepaid Insurance
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	13	1,120	30/04/2019	balance c/d	13	1120
			1,120				1,120
		Office Supplies
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	14	670	20/04/2019	Accounts Payable	21	150
2/4/2019	Accounts Payable	21	970	30/04/2019	balance c/d	14	1,490
			1,640				1,640
		Land
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
15/04/2019	Cash	11	7400	30/04/2019	balance c/d	16	67100
	Notes Payable	23	59700
			67100				67100
		Accounts Payable
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
17/04/2019	Cash	11	3360	1/4/2019	balance b/f	21	6510
20/04/2019	office supplies	14	150	2/4/2019	office supplies	14	970
30/04/2019	balance c/d	21	3970
			7480				7480
		Notes Payable
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
30/04/2019	balance c/d	16	59700	15/04/2019	Land	16	59700
			59700				59700
		Lester Wagner, Capital
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
30/04/2019	balance c/d	31	20200	1/4/2019	balance b/f	31	20200
			20200				20200
		Lester Wagner, Drawing
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	32	790
30/04/2019	Cash	11	750	30/4/2019	balance c/d	32	1540
			1540				1540
		Fees Earned
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
				1/4/2019	balance b/f	41	112290
30/04/2019	balance c/d	41	134670	30/04/2019	Accounts Receivable	12	22380
			134670				134670
		Salary and Commission Expense
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	51	82180	27/04/2019	cash	11	750
30/04/2019	Cash	11	7530	30/04/2019	balance c/d	51	88960
			89710				89710
		Rent Expense
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	52	11230
1/4/2019	Cash	11	3730	30/4/2019	balance c/d	52	14960
			14960				14960
		Advertising Expense
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	53	6630	30/04/2019	Balance c/d	53	6630
			6630				6630
		Miscellaneous Expense
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	59	1460
5/4/2019	Cash	11	2690
				30/04/2019	Balance c/d	59	4150
			4150				4150
		Unearned Rent
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
30/04/2019	Balance c/d	22	2240	30/04/2019	Cash	11	2240
			2240				2240
		Automobile expenses
Date	Particulars	Fn	Amount	Date	Particulars	Fn	Amount
1/4/2019	balance b/f	54	2020	30/04/2019	Balance c/d	54	3140
29/04/2019	Cash	11	1120
			3140				3140
The balance of salaries, commisssio expenses and cash will change, the expense will be less by 1800 and cash will increase by 1800