Question

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 $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.

  
The company's chart of accounts follows:

101	Cash	405	Commissions Earned
106	Accounts Receivable	612	Depreciation Expense—Computer Equip.
124	Office Supplies	622	Salaries Expense
128	Prepaid Insurance	637	Insurance Expense
167	Computer Equipment	640	Rent Expense
168	Accumulated Depreciation—Computer Equip.	650	Office Supplies Expense
209	Salaries Payable	684	Repairs Expense
307	Common Stock	688	Telephone Expense
318	Retained Earnings	901	Income Summary
319	Dividends

  
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.

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 $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.

  
The company's chart of accounts follows:

101	Cash	405	Commissions Earned
106	Accounts Receivable	612	Depreciation Expense—Computer Equip.
124	Office Supplies	622	Salaries Expense
128	Prepaid Insurance	637	Insurance Expense
167	Computer Equipment	640	Rent Expense
168	Accumulated Depreciation—Computer Equip.	650	Office Supplies Expense
209	Salaries Payable	684	Repairs Expense
307	Common Stock	688	Telephone Expense
318	Retained Earnings	901	Income Summary
319	Dividends

  
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.

Answer 1

1&2

ADVENTURE TRAVEL
General Journal
Date	Account Titles	Debit	Credit
Transactions for April (Part 2):
1-Apr	Cash	30,000
	Computer Equipment	20,000
	J. Nozomi, Capital		50,000
	Owner invested in the business.
2	Rent Expense	1,800
	Cash		1,800
	Paid one month's rent
3	Office Supplies	1,000
	Cash		1,000
	Acquired office supplies
10	Prepaid Insurance	2,400
	Cash		2,400
	Paid 12 months' premium in advance.
14	Salaries Expense	1,600
	Cash		1,600
	Paid two weeks' salaries.
24	Cash	8,000
	Commissions Earned		8,000
	Collected commissions from airlines.
28	Salaries Expense	1,600
	Cash		1,600
	Paid two weeks' salaries.
29	Repairs Expense	350
	Cash		350
	Repaired the computer.
30	Telephone Expense	750
	Cash		750
	Paid the telephone bill.
30	J. Nozomi, Withdrawals	1,500
	Cash		1,500
	Owner withdrew cash.

3. Using account balances from part 6.2, prepare an unadjusted trial balance

ADVENTURE TRAVEL
Unadjusted Trial Balance
30-Apr-17
Account Titles		Debits	Credits
Cash		$27,000
Accounts receivable		-
Office supplies		1,000
Prepaid insurance		2,400
Computer equipment		20,000
Accumulated depreciation - computer equipment			$0
Salaries payable			-
J. Nozomi, Capital		-	50,000
J. Nozomi, Withdrawals		1,500
Commissions earned			8,000
Depreciation expense - computer equipment		-
Salaries expense		3,200
Insurance expense		-
Rent expense		1,800
Office supplies expense		-
Repairs expense		350
Telephone expense		750
Totals		$58,000	58000

4

Adjusting Entries (Part 4):
30-Apr	Insurance Expense	133
	Prepaid Insurance		133
	To record expired insurance.
30	Office Supplies Expense	400
	Office Supplies		400
	To record cost of supplies used.
30	Depreciation Expense - Computer Equipment	500
	Accumulated Depreciation - Computer Equipment		500
	To record depreciation.
30	Salaries Expense	420
	Salaries Payable		420
	To record accrued salaries.
30	Accounts Receivable	1,750
	Commissions Earned		1,750
	To record accrued commissions.

Note:

As this question has multiple question so as per guideline I have answered first 4 questions