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 $35,000 cash and computer equipment worth $25,000 in the company in exchange for common stock.
		2		The company rented furnished office space by paying $2,800 cash for the first month’s (April) rent.
		3		The company purchased $1,500 of office supplies for cash.
		10		The company paid $2,100 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.
		14		The company paid $1,300 cash for two weeks' salaries earned by employees.
		24		The company collected $14,000 cash for commissions earned.
		28		The company paid $1,300 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 $900 cash for this month's telephone bill.
		30		The company paid $1,800 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:

1. Prepaid insurance of $117 has expired this month.
2. At the end of the month, $800 of office supplies are still available.
3. This month’s depreciation on the computer equipment is $400.
4. Employees earned $380 of unpaid and unrecorded salaries as of month-end.
5. The company earned $2,050 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 retained earnings 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.

Complete this question by entering your answers in the tabs below.

• Req 1 and 2
• Req 3
• Req 4 Adj Entries
• Req 4 Adj Trial Bal
• Req 5A
• Req 5B
• Req 5C
• Req 6A
• Req 6B GL
• Req 7

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.

བབས་པས་རབས་ཟླ་བ་བབས་བབས་པས་ records prepaid and unearned items in balance sheet accounts. View transaction list 3.35 points Journal entry worksheet 1 2 3 4 Skipped 5 6 7 8 9 10 > eBook Nozomi invested $35,000 cash and computer equipment worth $25,000 in the company in exchange for common stock. Print Note: Enter debits before credits. General Journal Debit Credit Date April 01 Record entry Clear entry View general journal Reg 1 and 2 Req3 >

Answer 1

Adventure Travel Reg 1 Journal entries Date Account 1-Apr Cash Computer Equipment Common Stock Credit Calculation Debit $ 35,000 $ 25,000 $ 60,000 $ 2,800 2-Apr Rent Expense Cash $ 2,800 $ 1,500 3-Apr Office Supplies Cash $ 1,500 $ 2,100 10-Apr Prepaid Insurance Cash $ 2,100 $ 1,300 14-Apr Salaries Expense Cash $ 1,300 $ 14,000 24-Apr Cash Commissions Earned $ 14,000 $ 1,300 28-Apr Salaries Expense Cash $ 1,300 $ 350 29-Apr Repairs Expense Cash $ 350 $ 900 30-Apr Telephone Expense Cash $ 900 $ 1,800 30-Apr Dividends Cash $ 1,800

Req4 Adjusting entries Date Account 30-Apr Insurance expense Prepaid Insurance Credit Calculation Debit $ 117 $ 117 $ 700 =1,500-800 30-Apr Office Supplies Expense Office Supplies $ 700 $ 400 30-Apr Depreciation Expense-Computer Equip. Accumulated Depreciation-Computer Equip. $ 400 $ 380 30-Apr Salaries expense Salaries Payable $ 380 $ 2,050 30-Apr Accounts Receivable Commissions Earned $ 2,050

Req 6a Closing entries Date Account 30-Apr Commissions Earned Income Summary Credit Debit $ 16,050 $ 16,050 $ 8,247 30-Apr Income Summary Depreciation Expense-Computer Equip. Salaries expense Insurance expense Rent expense Office Supplies Expense Repairs Expense Telephone Expense $ $ $ $ $ $ $ 400 2,980 117 2,800 700 350 900 $ 7,803 30-Apr Income Summary Retained Earnings $ 7,803 $ 1,800 30-Apr Retained Earnings Dividends $ 1,800

Date Credit Credit Debit Date Credit Accounts Receivable Date Debit Date Office Supplies 3-Apr $ 1,500 Date Debit Date Prepaid Insurance 10-Apr $ 2,100 Adventure Travel Req 2, 6b T Accounts Date Debit Date Credit Cash 1-Apr $ 35,000 2-Apr $ 2,800 24-Apr $ 14,000 3-Apr $ 1,500 10-Apr $ 2,100 14-Apr $ 1,300 28-Apr $ 1,300 29-Apr $ 350 30-Apr $ 900 30-Apr $ 1,800 Unadj Bal. $ 36,950 Unadj Bal. $ 1,500 Unadj Bal. $ 2,100 Unadj Bal. $ . 30-Apr $ 2,050 30-Apr $ 700 30-Apr $ 117 Adj Bal. $ 36,950 Adj Bal. $ 2,050 Adj Bal. $ 800 Adj Bal. $ 1,983 Bal. Bal. $ 1,983 Bal. $ 36,950 Computer Equipment 1-Apr $ 25,000 Bal. $ 2,050 Accum. Depr. - Computer Equip $ 800 Salaries Payable Unadj Bal. $ 25,000 Unadj Bal. $ 30-Apr $ . 400 Unadj Bal. $ 30-Apr $ . 380 Adj Bal. $ 25,000 Adj Bal. $ 400 Adj Bal. $ 380 Bal. $ 400 $ 380 $ 25,000 Common Stock 1-Apr $ 60,000 Bal. Retained Earnings Bal. Dividends 30-Apr $ 1,800 Income Summary Unadj Bal. $ 60,000 Unadj Bal. $ - Unadj Bal. $ 1,800 Unadj Bal. $ - Adj Bal. $ 60,000 Adj Bal. $ 1,800 Adj Bal. $ - 30-Apr $ 7,803 30-Apr $ 1,800 Adj Bal. $ - 30-Apr $ 16,050 30-Apr $ 1,800 30-Apr $ 8,247 30-Apr $ 7,803 Bal. Bal. $ 60,000 Commissions Earned 24-Apr $ 14,000 Insurance expense Bal. $ 6,003 Bal. $ - Depreciation Expense-Computer Equip. Salaries expense 14-Apr $ 1,300 28-Apr $ 1,300 Unadj Bal. $ 14,000 Unadi Bal.$ 30-Apr $ 2,050 30-Apr $ Unadj Bal. $ 2,600 30-Apr $ 380 Unadj Bal. $ 30-Apr $ - 117 400 Adj Bal. $ 16,050 Adj Bal. $ 400 Adj Bal. $ 2,980 Adj Bal. $ 117 30-Apr $ 16,050 30-Apr $ 400 30-Apr $ 2,980 30-Apr $ 117 $ - Bal. Bal. Rent expense 2-Apr $ 2,800 Office Supplies Expense Bal. $ . Repairs Expense 29-Apr $ 350 Bal. $ Telephone Expense 30-Apr $ 900 Unadj Bal. $ 2,800 Unadj Bal. $ 350 Unadi Bal. $ 900 Unadj Bal. $ 30-Apr $ . 700 Adj Bal. $ 2,800 Adj Bal. $ 700 Adj Bal. $ 350 Adj Bal. $ 900 30-Apr $ 2,800 30-Apr $ 700 30-Apr $ 350 30-Apr $ 900 Bal. $ - Bal. $. Bal. $.

Reg 3 Unadjusted TB Debit Credit 36,950 1,500 2,100 25,000 Req 4 Adjusted TB Debit Credit 36,950 2,050 800 1,983 25,000 400 380 60,000 60,000 Adventure Travel Account Names Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equipment Accumulated Depreciation-Computer Equip. Salaries Payable Common Stock Retained Earnings Dividends Commissions Earned Depreciation Expense-Computer Equip. Salaries expense Insurance expense Rent expense Office Supplies Expense Repairs Expense Telephone Expense Totals 1,800 1,800 14,000 16,050 400 2,980 2,600 117 2,800 350 900 74,000 2,800 700 350 900 76,830 74,000 76,830

Adventure Travel Account Names Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equipment Accumulated Depreciation-Computer Equip. Salaries Payable Common Stock Retained Earnings Totals Req7 Post Closing TB Debit Credit 36,950 2,050 800 1,983 25,000 400 380 60,000 6,003 66,783 66,783