Question

The following business transactions were completed by Elite Realty during April 2018: Apr. 1. Paid rent on office for month, $4,510. 2. Purchased office supplies on account, $1,170. 5. Paid annual insurance premiums, $3,250. 10. Received cash from clients on account, $22,570. 15. Purchased land for a future building site for $81,300, paying $8,900 in cash and giving a note payable for the remainder. 17. Paid creditors on account, $4,060. 20. Returned a portion of the office supplies purchased on November 2, receiving full credit for their cost, $180. 23. Paid advertising expense, $1,810. 27. Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $900. 28. Paid automobile expense (including rental charges for an automobile), $1,350. 29. Paid miscellaneous expenses, $410. 30. Recorded revenue earned and billed to clients during the month, $27,080. 30. Paid salaries and commissions for the month, $6,510. 30. Paid dividends, $900. 30. Rented land purchased on November 15 to local merchants association for use as a parking lot in December and January, during a street rebuilding program; received advance payment of $2,710. Required: Use the attached spreadsheet to complete parts 1 and 3. Click on the Spreadsheet icon to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. 1. Enter the April 1, 2018, balance of each account in the appropriate balance column of a four-column account. The word Balance has been entered in the item section and a check mark (√) has been placed in the Posting Reference column. 2. Journalize and insert the Posting References for the transactions for April in a two-column journal beginning on Page 18. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Rent Expense: $4,510 (Balance)

Office Supplies: $1,170 (Balance)

Prepaid Insurance: $3,250 (Balance)

Accounts Receivable: $22,570 (Balance)

Land: $81,300 (Balance)

Notes Payable: $72,400 (Balance)

Accounts Payable: $4,060 (Balance)

Advertising Expense: $1,810 (Balance)

Cash: Will be calculated based on the given transactions

Commission Payable: To be calculated based on the error in commission computation

Salaries and Commissions Expense: $6,510 (Balance)

Dividends: $900 (Balance)

Rental Revenue: $2,710 (Balance)

Explaination:

Apr. 1: Debit Rent Expense $4,510, Credit Cash $4,510.

Apr. 2: Debit Office Supplies $1,170, Credit Accounts Payable $1,170.

Apr. 5: Debit Prepaid Insurance $3,250, Credit Cash $3,250.

Apr. 10: Debit Cash $22,570, Credit Accounts Receivable $22,570.

Apr. 15: Debit Land $81,300, Debit Cash $8,900, Credit Notes Payable $72,400.

Apr. 17: Debit Accounts Payable $4,060, Credit Cash $4,060.

Apr. 20: Debit Accounts Payable $180, Credit Office Supplies $180.

Apr. 23: Debit Advertising Expense $1,810, Credit Cash $1,810.

Apr. 27: Debit Cash $900, Credit Commission Payable $900.

Apr. 28: Debit Automobile Expense $1,350, Credit Cash $1,350.

Apr. 29: Debit Miscellaneous Expense $410, Credit Cash $410.

Apr. 30: Debit Accounts Receivable $27,080, Credit Revenue $27,080.

Apr. 30: Debit Salaries and Commissions Expense $6,510, Debit Dividends $900, Credit Cash $7,410.

Apr. 30: Debit Cash $2,710, Credit Rental Revenue $2,710.

Each transaction has a corresponding debit and credit entry, maintaining the accounting equation (Assets = Liabilities + Equity). These journal entries track the flow of money within the company for the given month.