Question

On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month. April 1 Nozomi invested $32,000 cash and computer equipment worth $25,000 in the company. 2 The company rented furnished office space by paying $1,700 cash for the first month’s (April) rent. 3 The company purchased $1,000 of office supplies for cash. 10 The company paid $2,800 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $900 cash for two weeks' salaries earned by employees. 24 The company collected $10,500 cash for commissions earned. 28 The company paid $900 cash for two weeks' salaries earned by employees. 29 The company paid $400 cash for minor repairs to the company's computer. 30 The company paid $1,500 cash for this month's telephone bill. 30 Nozomi withdrew $1,900 cash from the company for personal use. 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 301 J. Nozomi, Capital 688 Telephone Expense 302 J. Nozomi, Withdrawals 901 Income Summary Use the following information: Prepaid insurance of $156 has expired this month. 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 $510 of unpaid and unrecorded salaries as of month-end. The company earned $1,550 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 the adjusting entries for the month and prepare the adjusted trial balance. 5a. Prepare the income statement for the month of April 30. 5b. Prepare the statement of owner's equity for the month of April 30. 5c. Prepare the balance sheet at April 30. 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

Part 1 & 2: Date Apr 1. General Journal Cash Computer equipment J. Nozomi, Capital Debit Credit 32000 25000 57000 Apr 2. 1700 Rent expense Cash 1700 Apr 3. 1000 Office supplies cash 1000 Apr 10. 2800 Prepaid insurance cash 2800 Apr 14. 900 salaries expense cash 900 Apr 24. 10500 cash commission earned 10500 Apr 28. 900 salaries expense cash Apr 29. 400 Repairs expense cash 400 Apr 30. 1500 Telephone expense cash 1500 Apr 30. 1900 J. Nozomi, With drawals cash 1900

Part 3 Credit Debit 31400 1000 2800 25000 ADVENTURE TRAVEL Unjusted Trial Balance April 30. Account Title Cash Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated depreciation-Computer equipment Salaries payable J. Nozomi, Capital J. Nozomi, Withdrawals Commissions earned Depreciation expense- Computer equipment Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense Total No. 101 106 124 128 167 168 209 301 302 405 612 622 637 640 650 684 688 57000 1900 10500 ol 1800 1700 0 400 1500 67500 67500

Credit Part 4: Transaction General Journal Insurance Expense Prepaid Insurance Debit 156 156 b 400 Office Supplies Expense Office Supplies (1000-600) 400 Depreciation Exp-Computer Equipment Accum Depreciation-Computer Equip 500 510 Salaries Expense Salaries Payable 510 1550 Accounts Receivable Commissions Earned 1550

Part 4. Credit Debit 31400 1550 600 2644 25000 No. 101 106 124 128 167 168 209 307 319 405 612 500 510 ADVENTURE TRAVEL Adjusted Trial Balance April 30. Account Title Cash Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated depreciation-Computer equipment Salaries payable J. Nozomi, Capital J. Nozomi, Withdrawals Commissions earned Depreciation expense- Computer equipment Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense Total 57000 622 Salaria 637 640 650 684 688 1900 12050 500 2310 156 1700 400 400 1500 70060170060

Credit Part 6a: Date General Journal Apr 30. Commissions earned Income summary Debit 12050 12050 6966 Apr 30. Income summary Depreciation expense-Computer equipment Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense 500 | 2310 156 1700 400 400 1500 5084 Apr 30. Income summary J. Nozomi, capital 5084 1900 Apr 30. J. Nozomi, capital J. Nozomi, Withdrawals 1900

Date Apr 1. Computer equipment Debit Credit Balance 25000 25000 preciation expense-computer equipme Date Debit Credit Balance Apr 30.Adj 500 500 Apr 30. close 5000 Repair expense Date Debit Credit Balance Apr 29. 400 400 Apr 30. Close. 400 0 Part 6b: Ledget Accounts cash Date Debit Credit Balance Apr 1. 32000 32000 Apr 2. 1700 30300 Apr 3. 1000 29300 Apr 10. 2800 26500 Apr 14. 900 25600 Apr 24. 10500 36100 Apr 28. 1900 35200 Apr 29. 400 34800 Apr 30. Tel. 1500 33300 Apr 30. WD 1900 31400 mulated depreciation-Computer equips Date Debit Credit Balance Apr 30. Adj. 500 500 salaries expense Date Debit Credit Balance Apr 14. 900 L 900 Apr 28. 900 1800 Apr 30. Adj. 510 2310 Apr 30. Close. 23100 Telephone expense Date Debit Credit Balance Apr 30. 1500 1500 Apr 30. Close. 1500 Salaries payable Date Debit Credit Balance Apr 30. Adj. 510 510 Income summary Date Debit Credit Balance Apr 30. Rev. 12050 12050 Apr 30. Exp. 6966 5084 Apr 30. Close 5084 Account recievable Debit Credit Balance 1550 1550 Date Apr 30. Adj. J. Nozomi, Capital Debit Credit Balance 57000 57000 5084 62084 1900 60184 Date Apr 1. Apr 30. Apr 30. Insurance expense Date Debit Credit Balance Apr 30. Adj. 156 156 Apr 30. Close. 156 0 Date Apr 3. Apr 30. Adj. Office supplies Debit Credit Balance 1000 1000 400 600 J. Nozomi, Withdrawals Date Debit Credit Balance Apr 30. 1900 1900 Apr 30. 1900 0 Rent expense Date Debit Credit Balance Apr 2. 1700 1700 Apr 30. Close. 1700 0 Date Apr 10. Apr 30. Adj. Prepaid insurance Debit Credit Balance 2800 2800 156 2644 Office supplies expense Date Debit Credit Balance Apr 30. Adj. 400 Apr 30. Close. 400 0 Commission earned Date Debit Credit Balance Apr 24. 10500 10500 Apr 30. Adj 1550 12050 Apr 30. close 12050 400 Sheeto Sheet 7 Sheets Sheets Sheet10 Sheet11 Sheet12 Sheet13 Sheet14 Sheet15 II

Part 7 Cash No. 101 106 124 128 167 168 209 301 ADVENTURE TRAVEL Post closing Trial balance April 30. Account Title Debit Credit 31400 Accounts receivable 1550 Office supplies 600 Prepaid insurance 2644 Computer equipment 25000 Accumulated depreciation - Computer equipment | 500 Salaries payable 510 J. Nozomi, Capital 60184 Total 61194 61194