Activity 7.

1 Journal entries and trial balance

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 Debit Credit

No. Balances 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 —
Lester Wagner, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 46,000
Lester Wagner, Drawing. . . . . . . . . . . . . . . . . . . . . . . . . . . 32 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 2019:

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 sales-person 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. Withdrew cash for personal use, ₱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, 2019, 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, 2019.