Elite Realty Unadjusted Trial Balance March 31, 20Y3 Account No. Debit Credit Balances Balances Cash 11 26,300 Accounts Receivable.. 12 61,500 Prepaid Insurance. 13 3,000 Office Supplies. Land Accounts Payable Unearned Rent.. 14 1,800 16 21 14,000 22 Notes Payable.. 23 Common Stock. 31 10,000 Retained Earnings. 32 36,000 Dividends 33 2,000 Fees Earned.. Salary and Commission Expense. 41 240,000 51 148,200 30,000 Rent Expense Advertising Expense... Automobile Expense Miscellaneous Expense 52 53 17,800 54 5,500 59 3,900 300,000 300,000
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted
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, $2300.
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, $4300.
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, $2300.
28. Paid automobile expense (including rental charges for an automobile), $ 1300.
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.
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?
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