March 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 27,000.00 2 Accounts Receivable
ID: 341744 • Letter: M
Question
March 31, 2018
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
27,000.00
2
Accounts Receivable
60,000.00
3
Prepaid Insurance
2,500.00
4
Office Supplies
1,600.00
5
Land
6
Accounts Payable
13,800.00
7
Unearned Rent
8
Notes Payable
9
Common Stock
10,000.00
10
Retained Earnings
36,900.00
11
Dividends
1,600.00
12
Fees Earned
232,000.00
13
Salary and Commission Expense
146,800.00
14
Rent Expense
27,000.00
15
Advertising Expense
18,000.00
16
Automobile Expense
4,500.00
17
Miscellaneous Expense
3,700.00
18
Totals
292,700.00
292,700.00
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, $5,000.
2
Purchased office supplies on account, $2,400.
5
Paid insurance premiums, $5,600.
10
Received cash from clients on account, $52,800.
15
Purchased land for a future building site for $222,500, paying $24,000 in cash and giving a note payable for the remainder.
17
Paid creditors on account, $6,250
20
Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, $380.
23
Paid advertising expense, $4,300.
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, $2,600.
28
Paid automobile expense (including rental charges for an automobile), $1,200.
29
Paid miscellaneous expenses, $1,500.
30
Recorded revenue earned and billed to clients during the month, $54,000.
30
Paid salaries and commissions for the month, $13,500.
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 $9,400.
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 $15,300. (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?
CHART OF ACCOUNTSElite RealtyGeneral Ledger
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
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.
PAGE 18PAGE 19
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
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. 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 jourLEDGER
Account: Cash11Account No.
Account: Accounts Receivable12Account No.
Account: Prepaid Insurance13Account No.
Account: Office Supplies14Account No.
Account: Land16Account No.
Account: Accounts Payable21Account No.
Account: Unearned Rent22Account No.
Account: Notes Payable23Account No.
Account: Common Stock31Account No.
Account: Retained Earnings32Account No.
Account: Dividends33Account No.
Account: Fees Earned41Account No.
Account: Salary and Commission Expense51Account No.
Account: Rent Expense52Account No.
Account: Advertising Expense53Account No.
DATE
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
1
2
Account: Automobile Expense54Account No.
Account: Miscellaneous Expense59Account No.
nal and the ledger as each item is posted.
4. Prepare an unadjusted trial balance of the ledger as of April 30, 2018.
Elite Realty
UNADJUSTED TRIAL BALANCE
April 30, 2018
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
2
Accounts Receivable
3
Prepaid Insurance
4
Office Supplies
5
Land
6
Accounts Payable
7
Unearned Rent
8
Notes Payable
9
Common Stock
10
Retained Earnings
11
Dividends
12
Fees Earned
13
Salary and Commission Expense
14
Rent Expense
15
Advertising Expense
16
Automobile Expense
17
Miscellaneous Expense
18
Totals
5. Assume that the April 30 transaction for salaries and commissions should have been $15,300.
(a) Why did the unadjusted trial balance in (4) balance?
(b) Journalize the correcting entry on April 30. Use page 20. (Note: You will not be required to post this entry to the ledger at this time.)
PAGE 20
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
(c) Is this error a transposition or slide?
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
27,000.00
2
Accounts Receivable
60,000.00
3
Prepaid Insurance
2,500.00
4
Office Supplies
1,600.00
5
Land
6
Accounts Payable
13,800.00
7
Unearned Rent
8
Notes Payable
9
Common Stock
10,000.00
10
Retained Earnings
36,900.00
11
Dividends
1,600.00
12
Fees Earned
232,000.00
13
Salary and Commission Expense
146,800.00
14
Rent Expense
27,000.00
15
Advertising Expense
18,000.00
16
Automobile Expense
4,500.00
17
Miscellaneous Expense
3,700.00
18
Totals
292,700.00
292,700.00
Explanation / Answer
Required details are as computed below:
Date Particulars L.F Amount ($) Amount ($) Apr-01 Rent expense 5,000 cash 5,000 (For rent paid) Apr-02 Office supplies 2,400 Account payable 2,400 (for office supplies purchased) Apr-05 Prepaid insurance 5,600 cash 5,600 (For premium paid) Apr-10 Cash 52,800 Account Receivable 52,800 (For cash from client received) Apr-15 Land 222,500 cash 24,000 Notes payable 198,500 (For land purchased) Apr-17 Account payable 6,250 cash 6,250 (For paid to creditors) Apr-20 Account payable 380 Office Supplies 380 (For office supplies returned) Apr-23 Advertising exp 4,300 cash 4,300 (For paid advertising exp) Apr-27 cash 2,600 salary and commission 2,600 (For cash received for overpayment) Apr-28 Automobile exp 1,200 cash 1,200 (For paid for automobile exp) Apr-29 Miscellaneous exp 1,500 cash 1,500 (for paid for miscellaneous exp Apr-30 Account Receivable 54,000 Fees earned 54,000 (for revenue earned) Apr-30 salary and commissions 13,500 cash 13,500 (for paid for salary and commissions) Apr-30 Dividends 4,000 cash 4,000 (for dividend paid) Apr-30 Cash 9,400 Unearned rent 9,400 (For cash received in advance)