Journal entries and trial balance Obj. 1, 2, 3, 4 Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 20Y3, follows:

Elite Realty Unadjusted Trial Balance March 31, 20Y3 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 —

Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 10,000 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 36,000 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 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 20Y3:

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. 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.

Instructions 1. Record the April 1, 20Y3, 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, 20Y3.

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?

AppendixLO1