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 $30,000 cash and computer equipment worth $20,000 in the company. Received common stock (50,000 shares at $1 par).
	2	The company rented furnished office space by paying $1,800 cash for the first & last month's 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	Nozomi received $1,500 cash dividends from the company.

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	Common Stock	688	Telephone Expense
302	Dividends	901	Income Summary

Required: Create: Chart of Accounts, General Ledger, General Journal, Unadjusted Trial Balance, Adjusted Trial Balance, Post-Closing Trial Balance, Income Statement, Statement of Retained Earnings, Balance Sheet. READ the information on the accounting cycle, general ledger, etc. prior to beginning the assignment.

1. Use the balance column format to set up each ledger account listed in its chart of accounts.

2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts.

3. Prepare an unadjusted trial balance as of April 30.

4. Use the following information to journalize and post adjusting entries for the month:

        1. Two-thirds (or $133) of one month's insurance coverage has expired.

         2. At the end of the month, $600 of office supplies are still available.

        3. This month's depreciation on the computer equipment is $500.

         4. Employees earned $420 of unpaid and unrecorded salaries as of month-end.

          5. The company earned $1,750 of commissions that are not yet billed at month-end.

5. Prepare the adjusted trial balance as of April 30. Prepare the income statement and the statement of retained earnings for the month of April and the balance sheet at April 30.

6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.

7. Prepare a post-closing trial balance

8. Check    

(3) Unadj. trial balance totals, $58,000
(4a) Dr. Insurance Expense, $133
(5) Net income, $2,197Retained Earnings (4/30), $697; Total assets, $51,117
(7) P-C trial balance totals, $51,617

Answer 1