Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2019, follows: Elite Realty Unadjusted Trial Balance March 31, 2019 Account No. Debit Balances Credit Balances 11 Cash 10,990 12 Accounts Receivable 25,590 13 Prepaid Insurance 1,250 14 Office Supplies 750 16 Land — 21 Accounts Payable 7,240 22 Unearned Rent — 23 Notes Payable — 31 Lester Wagner, Capital 22,500 32 Lester Wagner, Drawing 870 41 Fees Earned 124,840 51 Salary and Commission Expense 91,410 52 Rent Expense 12,480 53 Advertising Expense 7,370 54 Automobile Expense 2,250 59 Miscellaneous Expense 1,620 154,580 154,580 The following business transactions were completed by Elite Realty during April 2019: Enter the following transactions on Page 18 of the two-column journal. Apr. 1. Paid rent on office for month, $4,200. 2. Purchased office supplies on account, $1,090. 5. Paid insurance premiums, $3,020. 10. Received cash from clients on account, $20,980. 15. Purchased land for a future building site for $75,500, paying $8,300 in cash and giving a note payable for the remainder. 17. Paid creditors on account, $3,780. 20. Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, $170. 23. Paid advertising expense, $1,680. Enter the following transactions on Page 19 of the two-column journal. 27. Discovered an error in computing a commission; received cash from the sales person for the overpayment, $840. 28. Paid automobile expense (including rental charges for an automobile), $1,260. 29. Paid miscellaneous expenses, $380. 30. Recorded revenue earned and billed to clients during the month, $25,180. 30. Paid salaries and commissions for the month, $5,460. 30. Withdrew cash for personal use, $840. 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 $2,520.
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
| Elite Realty | |||
| Unadjusted Trial Balance | |||
| March 31, 2019 | |||
| Account No. |
Debit Balances |
Credit Balances |
|
| 11 | Cash | 10,990 | |
| 12 | 25,590 | ||
| 13 | Prepaid Insurance | 1,250 | |
| 14 | Office Supplies | 750 | |
| 16 | Land | — | |
| 21 | Accounts Payable | 7,240 | |
| 22 | Unearned Rent | — | |
| 23 | Notes Payable | — | |
| 31 | Lester Wagner, Capital | 22,500 | |
| 32 | Lester Wagner, Drawing | 870 | |
| 41 | Fees Earned | 124,840 | |
| 51 | Salary and Commission Expense | 91,410 | |
| 52 | Rent Expense | 12,480 | |
| 53 | Advertising Expense | 7,370 | |
| 54 | Automobile Expense | 2,250 | |
| 59 | Miscellaneous Expense | 1,620 | |
| 154,580 | 154,580 |
The following business transactions were completed by Elite Realty during April 2019:
Enter the following transactions on Page 18 of the two-column journal.
| Apr. 1. | Paid rent on office for month, $4,200. |
| 2. | Purchased office supplies on account, $1,090. |
| 5. | Paid insurance premiums, $3,020. |
| 10. | Received cash from clients on account, $20,980. |
| 15. | Purchased land for a future building site for $75,500, paying $8,300 in cash |
| and giving a note payable for the remainder. | |
| 17. | Paid creditors on account, $3,780. |
| 20. | Returned a portion of the office supplies purchased on April 2, receiving |
| full credit for their cost, $170. | |
| 23. | Paid advertising expense, $1,680. |
| Enter the following transactions on Page 19 of the two-column journal. | |
| 27. | Discovered an error in computing a commission; received cash from the sales person |
| for the overpayment, $840. | |
| 28. | Paid automobile expense (including rental charges for an automobile), $1,260. |
| 29. | Paid miscellaneous expenses, $380. |
| 30. | Recorded revenue earned and billed to clients during the month, $25,180. |
| 30. | Paid salaries and commissions for the month, $5,460. |
| 30. | Withdrew cash for personal use, $840. |
| 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 $2,520. |
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