Elite Realty acts as an agent in buying, selling, renting, and managing real est
ID: 2515143 • Letter: E
Question
Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2016, follows:
Elite Realty
UNADJUSTED TRIAL BALANCE
March 31, 2016
1
Cash
26,000.00
2
Accounts Receivable
62,000.00
3
Prepaid Insurance
3,000.00
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
36,300.00
11
Dividends
1,700.00
12
Fees Earned
233,900.00
13
Salary and Commission Expense
146,800.00
14
Rent Expense
28,000.00
15
Advertising Expense
16,600.00
16
Automobile Expense
4,200.00
17
Miscellaneous Expense
4,100.00
18
Totals
294,000.00
294,000.00
The following business transactions were completed by Elite Realty during April 2016. Enter the transactions through the 23rd on Page 18 of the two-column journal:
Enter the remaining transactions on Page 19 of the two-column journal:
Land purchased on April 15 used by local merchants association as a parking lot in May and June, during a street rebuilding program; received advance payment of $9,800.
Stuck on 3-5
ACCOUNT TITLE DEBIT CREDIT1
Cash
26,000.00
2
Accounts Receivable
62,000.00
3
Prepaid Insurance
3,000.00
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
36,300.00
11
Dividends
1,700.00
12
Fees Earned
233,900.00
13
Salary and Commission Expense
146,800.00
14
Rent Expense
28,000.00
15
Advertising Expense
16,600.00
16
Automobile Expense
4,200.00
17
Miscellaneous Expense
4,100.00
18
Totals
294,000.00
294,000.00
Explanation / Answer
Part 3)
The ledger accounts are prepared as below:
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Part 4)
The unadjusted trial balance is prepared as below:
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Part 5)
a) The unadjusted trial balance matched between the incorrect entry had a double entry effect which resulted in equal impact on the debit and credit balances by decreasing cash account balance and increasing salary and commission expense account balance (by the same amount of $14,700).
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c) This error is classified as "transposition". This type of error results from data entry when two digits (either inividually or as a part of a large number) are reversed/incorrectly posted or positioned. In the given case, the digits 4 and 7 were incorrectly positioned at the time of punching/recording the numbers in financials.
Cash Balance Date Item Post. Ref. Debit Credit Debit Credit 2016 Apr. 1 Balance 26,000 1 4,500 21,500 5 5,600 15,900 10 52,600 68,500 15 23,000 45,500 17 5,800 39,700 23 4,200 35,500 27 3,000 38,500 28 1,500 37,000 29 1,200 35,800 30 14,700 21,100 30 4,000 17,100 30 9,800 26,900Related Questions
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