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ASSETS 11 Cash 12 Accounts Receivable 13 Prepaid Insurance 14 Office Supplies 16 Land LIABILITIES 21...

ASSETS
11 Cash
12 Accounts Receivable
13 Prepaid Insurance
14 Office Supplies
16 Land
LIABILITIES
21 Accounts Payable
22 Unearned Rent
23 Notes Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
REVENUE
41 Fees Earned
EXPENSES
51 Salary and Commission Expense
52 Rent Expense
53 Advertising Expense
54 Automobile Expense
59 Miscellaneous Expense

Complete a Ledger Account with the requirments stated.

Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2018, follows:

Elite Realty

UNADJUSTED TRIAL BALANCE

March 31, 2018

ACCOUNT TITLE DEBIT CREDIT

1

Cash

25,100.00

2

Accounts Receivable

59,000.00

3

Prepaid Insurance

3,300.00

4

Office Supplies

2,500.00

5

Accounts Payable

13,700.00

6

Common Stock

10,000.00

7

Retained Earnings

37,400.00

8

Dividends

1,500.00

9

Fees Earned

226,400.00

10

Salary and Commission Expense

145,000.00

11

Rent Expense

25,000.00

12

Advertising Expense

17,600.00

13

Automobile Expense

4,400.00

14

Miscellaneous Expense

4,100.00

15

Totals

287,500.00

287,500.00

The following business transactions were completed by Elite Realty during April 2018. Enter the transactions through the 23rd on Page 18 of the two-column journal:

Apr. 1 Paid rent on office for month, $5,500.
2 Purchased office supplies on account, $2,300.
5 Paid insurance premiums, $5,000.
10 Received cash from clients on account, $52,800.
15 Purchased land for a future building site for $203,000, paying $27,000 in cash and giving a note payable for the remainder.
17 Paid creditors on account, $6,050
20 Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, $370.
23 Paid advertising expense, $4,000.

Enter the following transactions on Page 19 of the two-column journal:

Apr. 27 Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $2,500.
28 Paid automobile expense (including rental charges for an automobile), $1,800.
29 Paid miscellaneous expenses, $1,800.
30 Recorded revenue earned and billed to clients during the month, $58,000.
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.
Required:
1. Record the April 1, 2018, balance of each account in the appropriate balance column of a four-column account, type Balance in the item section, and select a check mark in the Posting Reference column.
2. Journalize the transactions for April in a two-column journal beginning on Page 18. Refer to the Chart of Accounts for exact wording of account titles. Insert the appropriate posting references in both the journal and the ledger as each item is posted.
3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. Post in chronological order. For transactions occurring on the same day, post in the order presented in the instructions. Insert the appropriate posting references in both the journal and the ledger as each item is posted.
4. Prepare an unadjusted trial balance of the ledger as of April 30, 2018.
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 on April 30. Use page 20. (Note: You will not be required to post this entry to the ledger at this time.) (c) Is this error a transposition or slide?

Solutions

Expert Solution

2. Journalize the transactions for April in a two-column journal beginning on Page 18.
                                              JOURNAL                                                        Page 18
Date Account Debit Credit
April 1, 2018 Rent Expense 5500
        Cash 5500
April 2, 2018 Office supplies 2300
       Accounts Payable 2300
April 5, 2018 Prepaid Insurance 5000
       Cash 5000
April 10, 2018 Cash 52800
       Accounts Receivable 52800
April 15, 2018 Land 203000
       Cash 27000
       Note payable 176000
April 17, 2018 Accounts payable 6050
      Cash 6050
April 20, 2018 Accounts Payable 370
     Office Supplies 370
April 23, 2018 Advertising Expense 4000
      Cash 4000
                                              JOURNAL                                                        Page 19
Date Account Debit Credit
April 27, 2018 Cash 2500
         Salary and Commission expense 2500
April 28, 2018 Automobile Expense 1800
         Cash 1800
April 29, 2018 Miscellaneous Expense 1800
         Cash 1800
April 30, 2018 Accounts Receivable 58000
     Fees Earned 58000
April 30, 2018 Salary and Commission expense 11900
        Cash 11900
April 30, 2018 Dividends 4000
        Cash 4000
April 30, 2018 Cash 10000
        Unearned rent 10000
1. Record the April 1, 2018, balance of each account in the appropriate balance column of a four-column account, type Balance in the item section, and select a check mark in the Posting Reference column.                                                      3. Post to the ledger, extending the account balance to the appropriate balance column after each posting.
Ledger Accounts
Cash
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 25100
April 1, 2018 5500 19600
April 5, 2018 5000 14600
April 10, 2018 52800 67400
April 15, 2018 27000 40400
April 17, 2018 6050 34350
April 23, 2018 4000 30350
April 27, 2018 2500 32850
April 28, 2018 1800 31050
April 29, 2018 1800 29250
April 30, 2018 11900 17350
April 30, 2018 4000 13350
April 30, 2018 10000 23350
Accounts Receivable
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 59000
April 10, 2018 52800 6200
April 30, 2018 58000 64200
Prepaid Insurance
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 3300
April 5, 2018 5000 8300
Office Supplies
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 2500
April 2, 2018 2300 4800
April 20, 2018 370 4430
Accounts Payable
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 13700
April 2, 2018 2300 16000
April 17, 2018 6050 9950
April 20, 2018 370 9580
Common Stock
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 10000
Retained Earnings
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 37400
Dividends
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 1500
April 30, 2018 4000 5500
Fees Earned
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 226400
April 30, 2018 58000 284400
Salary and commission Expense
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 145000
April 27, 2018 2500 142500
April 30, 2018 11900 154400
Rent Expense
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 25000
April 1, 2018 5500 30500
Advertising expense
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 17600
April 23, 2018 4000 21600
Automobile Expense
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 4400
April 28, 2018 1800 6200
Miscelleneous Expense
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 1, 2018 Balance _/ 4100
April 29, 2018 1800 5900
Land
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 15, 2018 203000 203000
Note Payable
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 15, 2018 176000 176000
Unearned rent
Date Account Post ref. Amount Balance
Debit Credit Debit Credit
April 30, 2018 10000 10000
4. Prepare an unadjusted trial balance of the ledger as of April 30, 2018.
Trial Balance
As on April 30, 2018
Account Debit Credit
Cash 23350
Accounts Receivable 64200
Prepaid Insurance 8300
Office Supplies 4430
Accounts Payable 9580
Common Stock 10000
Retained Earnings 37400
Dividends 5500
Fees Earned 284400
Salary and commission Expense 154400
Rent Expense 30500
Advertising expense 21600
Automobile Expense 6200
Miscelleneous Expense 5900
Land 203000
Note Payable 176000
Unearned rent 10000
TOTALS 527380 527380
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 on April 30. Use page 20. (Note: You will not be required to post this entry to the ledger at this time.) (c) Is this error a transposition or slide
(a) The unadjusted trial balance in (4) is balanced, because the error is committed in debit and credit both sides with the same amount. Hence there was no difference in trial balance.
(b)
                                              JOURNAL                                                        Page 20
Date Account Debit Credit
April 30, 2018 Salary and Commission expense 7200
        Cash 7200
© This is a transposition error, which is committed on both sides. Hence correcting entry will be made for both sides, with diffence in amount.

ekkarill92 answered 7 months ago
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