Question

Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2043, follows: CREDIT Elite Realty UNADJUSTED TRIAL BALANCE March 31, 2073 ACCOUNT TITLE DEBIT 1 Cash 25200.00 2 Accounts Receivable 62.500.00 3 Prepaid Insurance 2,500.00 4 Office Supplies 1,600.00 5 Accounts Payable 6 Common Stock 7 Retained Eamings 8 Dividends 2,100.00 9 Fees Eamed 10 Salary and Commission Expense 145,500.00 11 Rent Expense 27,000.00 12 Advertising Expense 16,600.00 13 Automobile Expense 5,900.00 14 Miscellaneous Expense 3,900.00 15 Totals 292,800.00 12,100.00 10,000.00 3760000 233,100.00 292,800.00 The following business transactions were completed by Elite Realty during April 20Y3. 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, $2,000. 5 Paid insurance premiums, $8,200. 10 Received cash from clients on account, $52,400. 15 Purchased land for a future building site for $234,000, paying $21,000 in cash and giving a note payable for the remainder. 17 Paid creditors on account, $8,500 20 Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, $380. 23 Paid advertising expense, $4,100.

Answer 1

2. In the books of Elite Realty :

Date	Description	Debit	Credit	Asset	Liability	Equity
20Y3		$	$
April 1	Rent Expense	5,000				- 5,000
	Cash		5,000	- 5,000
April 2	Office Supplies	2,000		2,000
	Accounts Payable		2,000		2,000
April 5	Prepaid Insurance	6,200		6,200
	Cash		6,200	-6,200
April 10	Cash	52,400		52,400
	Accounts Receivable		52,400	-52,400
April 15	Land	234,000		234,000
	Cash		21,000	-21,000
	Note Payable		213,000		213,000
April 17	Accounts Payable	6,500
	Cash		6,500	- 6,500	-6,500
April 20	Accounts Payable	360		-360
	Office Supplies		360		-360
April 23	Advertising Expense	4,100				- 4,100
	Cash		4,100	- 4,100
April 27	Cash	2,700		2,700
	Salary and Commission Expense		2,700			2,700
April 28	Automobile Expense	1,300				- 1,300
	Cash		1,300	- 1,300
29	Miscellaneous Expense	1,400				- 1,400
	Cash		1,400	- 1,400
30	Accounts Receivable	55,000		55,000
	Fees Earned		55,000			55,000
30	Salary and Commissions Expense	13,500				- 13,500
	Cash		13,500	- 13,500
30	Dividends	4,000				- 4,000
	Cash		4,000	- 4,000
30	Cash	9,400		9,400
	Unearned Rent		9,400		9,400

5. a. The unadjusted trial balance balanced, because this was a double sided error. Being a cash transaction,the entry was recorded in the cash payments journal, and posted therefrom to the Salary and Commission Expense account in the ledger.

b.

Date	Description	Debit	Credit
		$	$
April 30	Salary and Commission Expense	1,800
	Cash		1,800

c. This is a transposition error.