Homework SourseOn April 1 2017 Jiro Nozomi created a new travel agency Adve
On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
The company\'s chart of accounts follows:
Use the following information:
Two-thirds (or $133) of one month’s insurance coverage has expired.
At the end of the month, $600 of office supplies are still available.
This month’s depreciation on the computer equipment is $500.
Employees earned $420 of unpaid and unrecorded salaries as of month-end.
The company earned $1,750 of commissions that are not yet billed at month-end.
Required:
1. & 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b. The company records prepaid and unearned items in balance sheet accounts.
3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30.
4. Journalize and post the adjusting entries for the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of April 30, 2017.
5b. Prepare the statement of retained earnings for the month of April 30, 2017.
5c. Prepare the balance sheet at April 30, 2017.
6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.
| April | 1 | Nozomi invested $30,000 cash and computer equipment worth $20,000 in the company in exchange for common stock. | ||
| 2 | The company rented furnished office space by paying $1,800 cash for the first month\'s (April) rent. | |||
| 3 | The company purchased $1,000 of office supplies for cash. | |||
| 10 | The company paid $2,400 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. | |||
| 14 | The company paid $1,600 cash for two weeks\' salaries earned by employees. | |||
| 24 | The company collected $8,000 cash on commissions from airlines on tickets obtained for customers. | |||
| 28 | The company paid $1,600 cash for two weeks\' salaries earned by employees. | |||
| 29 | The company paid $350 cash for minor repairs to the company\'s computer. | |||
| 30 | The company paid $750 cash for this month\'s telephone bill. | |||
| 30 | The company paid $1,500 cash in dividends. |
Solution
1.
3.
4.
5a.
5b.
5c.
6a.
7.
| Adventure Travel | |||
| General journal for the month of April 2017 | |||
| Date | Account Title | Debit | Credit |
| 4/1/2017 | Cash | 30000 | |
| Computer Equipment | 20000 | ||
| Common Stock | 50000 | ||
| (Investment made ) | |||
| 4/2/2017 | Rent expense | 1800 | |
| Cash | 1800 | ||
| (Rent paid for April) | |||
| 4/3/2017 | Office supplies | 1000 | |
| Cash | 1000 | ||
| (Office supplies purchase for cash) | |||
| 4/10/2017 | Prepaid expense | 2400 | |
| Cash | 2400 | ||
| (Cash paid for 12-month insurance policy) | |||
| 4/14/2017 | Salaries expense | 1600 | |
| Cash | 1600 | ||
| (Cash paid for two weeks\' salaries) | |||
| 4/24/2017 | Cash | 8000 | |
| Commission earned | 8000 | ||
| (Cash received for commission earned) | |||
| 4/28/2017 | Salaries expense | 1600 | |
| Cash | 1600 | ||
| (Cash paid for two weeks\' salaries) | |||
| 4/29/2017 | Repairs expense | 350 | |
| Cash | 350 | ||
| (Cash paid for repairs expense) | |||
| 4/30/2017 | Telephone expense | 750 | |
| Cash | 750 | ||
| (Cash paid for telephone expense) | |||
| 4/30/2017 | Dividends | 1500 | |
| Cash | 1500 | ||
| (Cash paid for dividends) |
