Elite Realty Unadjusted Trial Balance March 31, 2019 Account No. Debit Balances Credit Balances Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 26,300 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 61,500 Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3,000 Office Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1,800 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 — Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 14,000 Unearned Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 — Notes Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 — Lester Wagner, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 46,000 Lester Wagner, Drawing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 2,000 Fees Earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 240,000 Salary and Commission Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 148,200 Rent Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 30,000 Advertising Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 17,800 Automobile Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 5,500 Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 3,900 300,000 300,000
The following business transactions were completed by Elite Realty during April 2019:
Apr. 1. Paid rent on office for month, $6,500.
2. Purchased office supplies on account, $2,300.
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, $4,300.
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, $2,500.
28. Paid automobile expense (including rental charges for an automobile), $1,500.
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. Withdrew cash for personal use, $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, 2019, 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, 2019.
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?
Answer:
2. and 3.
Page 18
Post.
Ref. Debit Credit
2019
Apr. 1 Rent Expense52 6,500
Cash11 6,500
2 Office Supplies14 2,300
Accounts Payable 21 2,300
5 Prepaid Insurance 13 6,000
Cash11 6,000
10 Cash11 52,300
Accounts Receivable 12 52,300
15 Land16 200,000
Cash11 30,000
Notes Payable23 170,000
17 Accounts Payable21 6,450
Cash11 6,450
20 Accounts Payable21 325
Office Supplies 14 325
23 Advertising Expense 53 4,300
Cash11 4,300
Page 19
Post.
Ref. Debit Credit
2019
Apr. 27 Cash11 2,500
Salary and Commission Expense 51 2,500
28 Automobile Expense 54 1,500
Cash11 1,500
29 Miscellaneous Expense 59 1,400
Cash11 1,400
30 Accounts Receivable 12 57,000
Fees Earned41 57,000
30 Salary and Commission Expense 51 11,900
Cash11 11,900
30 Lester Wagner, Drawing 32 4,000
Cash11 4,000
30 Cash11 10,000
Unearned Rent22 10,000
1. and 3.
Account No. 11
Post.
Item Ref. Debit Debit Credit
2019
Apr. 1 Balance 26,300
1 1819,800
5 1813,800
10 18 52,300 66,100
15 1836,100
17 1829,650
23 1825,350
27 19 2,500 27,850
28 1926,350
29 1924,950
30 1913,050
30 199,050
30 19 10,000 19,050
Account No. 12
Post.
Item Ref. Debit Debit Credit
2019
Apr. 1 Balance 61,500
10 189,200
30 19 57,000 66,200
Account No. 13
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 3,000
5 18 6,000 9,000
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 1,800
2 18 2,300 4,100
20 18 325 3,775
Account No. 16
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 15 18 200,000 200,000
Account No. 21
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 14,000
2 18 2,300 16,300
17 18 6,4509,850
20 18 3259,525
Account No. 22
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 30 19 10,000 10,000
Account No. 23
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 15 18 170,000 170,000
Account No. 31
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 46,000
Account No. 32
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 2,000
30 19 4,000 6,000
Account No. 41
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 240,000
30 19 57,000 297,000
Account No. 51
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 148,200
27 19 2,500 145,700
30 19 11,900 157,600
Account No. 52
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 30,000
1 18 6,500 36,500
Account No. 53
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 17,800
23 18 4,300 22,100
Account No. 54
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 5,500
28 19 1,500 7,000
Account No. 59
Post.
Item Ref. Debit Credit Debit Credit
2019
Apr. 1 Balance 3,900
29 19 1,400 5,300
4.
Account Debit Credit
No. Balances Balances
Cash11 19,050
Accounts Receivable12 66,200
Prepaid Insurance13 9,000
Office Supplies14 3,775
Land16 200,000
Accounts Payable21 9,525
Unearned Rent22 10,000
Notes Payable23 170,000
Lester Wagner, Capital31 46,000
Lester Wagner, Drawing 32 6,000
Fees Earned41 297,000
Salary and Commission Expense 51 157,600
Rent Expense52 36,500
Advertising Expense53 22,100
Automobile Expense54 7,000
Miscellaneous Expense59 5,300
532,525 532,525
5. (a) The unadjusted trial balance in (4) still balances because the debits equaled
the credits in the original journal entry.
(b) The correcting entry for $7,200 ($19,100 – $11,900) would be as follows:
2019
Apr. 30 Salary and Commission Expense 51 7,200
Cash11 7,200
(c) Transposition