Utopia Realty acts as an agent in buying

Price: $3.99


PR 2-4A Journal entries and trial balance

Utopia Realty acts as an agent in buying, selling, renting, and managing real estate. The
unadjusted trial balance on October 31, 2012, is shown below.

11 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,150
12 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,750
13 Prepaid Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500
14 Office Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900
16 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
21 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000
22 Unearned Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
23 Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
31 Ian Rogstad, Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,000
32 Ian Rogstad, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
41 Fees Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
51 Salary and Commission Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,100
52 Rent Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
53 Advertising Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,900
54 Automobile Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,750
59 Miscellaneous Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,950
150,000 150,000

Nov. 1. Paid rent on offi ce for month, $5,000.
2. Purchased offi ce supplies on account, $1,300.
5. Paid annual insurance premiums, $3,600.
10. Received cash from clients on account, $25,000.
15. Purchased land for a future building site for $90,000, paying $10,000 in cash
and giving a note payable for the remainder.
17. Paid creditors on account, $4,500.
20. Returned a portion of the offi ce supplies purchased on November 2, receiving
full credit for their cost, $200.
23. Paid advertising expense, $2,000.
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, $1,000.
28. Paid automobile expense (including rental charges for an automobile), $1,500.
29. Paid miscellaneous expenses, $450.
30. Recorded revenue earned and billed to clients during the month, $30,000.
30. Paid salaries and commissions for the month, $7,500.
30. Withdrew cash for personal use, $1,000.
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 $3,000.
Instructions
1. Record the November 1, 2010, 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 November 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 November 30, 2012.
5. Assume that the November 30 transaction for salaries and commissions should have
been $5,700. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize
the correcting entry. (c) Is this error a transposition or slide?