In: Accounting
On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
April |
1 |
Nozomi invested $31,000 cash and computer equipment worth $40,000 in the company in exchange for common stock. |
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2 |
The company rented furnished office space by paying $2,100 cash for the first month’s (April) rent. |
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3 |
The company purchased $1,200 of office supplies for cash. |
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10 |
The company paid $2,700 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. |
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14 |
The company paid $1,400 cash for two weeks' salaries earned by employees. |
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24 |
The company collected $20,000 cash on commissions from airlines on tickets obtained for customers. |
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28 |
The company paid $1,400 cash for two weeks' salaries earned by employees. |
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29 |
The company paid $500 cash for minor repairs to the company's computer. |
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30 |
The company paid $750 cash for this month's telephone bill. |
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30 |
The company paid $2,300 cash in dividends. |
The company's chart of accounts follows:
101 |
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Cash |
405 |
Commissions Earned |
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106 |
Accounts Receivable |
612 |
Depreciation Expense—Computer Equip. |
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124 |
Office Supplies |
622 |
Salaries Expense |
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128 |
Prepaid Insurance |
637 |
Insurance Expense |
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167 |
Computer Equipment |
640 |
Rent Expense |
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168 |
Accumulated Depreciation—Computer Equip. |
650 |
Office Supplies Expense |
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209 |
Salaries Payable |
684 |
Repairs Expense |
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307 |
Common Stock |
688 |
Telephone Expense |
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318 |
Retained Earnings |
901 |
Income Summary |
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319 |
Dividends |
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Use the following information:
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.