Question

Problem 4-1A Applying the accounting cycle LO C2, P2, P3 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 $40,000 cash and computer equipment worth $25,000 in the company. 2 The company rented furnished office space by paying $2,400 cash for the first month's (April) rent. 3 The company purchased $1,200 of office supplies for cash. 10 The company paid $2,000 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,200 cash for two weeks' salaries earned by employees. 24 The company collected $9,500 cash for commissions earned. 28 The company paid $1,200 cash for two weeks' salaries earned by employees. 29 The company paid $300 cash for minor repairs to the company's computer. 30 The company paid $1,300 cash for this month's telephone bill. 30 Nozomi withdrew $2,100 cash from the company for personal use. The company's chart of accounts follows: 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation-Computer Equip. 209 Salaries Payable 301 J. Nozomi, Capital 302 J. Nozomi, Withdrawals 405 Commissions Earned 612 Depreciation Expense-Computer Equip. 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary Use the following information: a. Prepaid insurance of $111 has expired this month. b. At the end of the month, $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $300. d. Employees earned $460 of unpaid and unrecorded salaries as of month-end. e. 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 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. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Req SA Reg 5B Req 5C Reg 6A Reg 6B GL Req 7

Answer 1

Date General Journal Debit Credit Apr-01 Cash Computer equipment J. Nozomi Capital 40000 25000 650001 2400 Apr-02 Rent expense cash 2400 Apr-03 Office supplies cash 1200 2000 Apr-10 Prepaid insurance cash 2000 1200 Apr-14 Salaries expense cash 1200 9500 Apr-24 Cash commissions earned 9500 1200 Apr-28 Salaries expense cash 1200 300 Apr-29 Repairs expense cash 300 1300 Apr-30 Telephone expense | cash 1300 2100 Apr-30). Nozomi Withdrawals cash 2100 Adjusting entries 111 Insurance expense Prepaid insurance 600 Office supplies expense office supplies 600 dep. Expense-computer Accumulated dep.-computer d. 460 Salaries expense salaries payable 460 e. 1750 Accounts receivable commissions earned 1750 Closing entries 11250 Commissions earned Income Summary 11250 7871 Income summary dep. Expense -computer Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense 300 2860 111 2400 600 300 1300 L 3379 Income summary J.Nozomi Capital 3379 2100 J.Nozomi Capital J.Nozomi Withdrawals 2100

Cash Date Debit Credit Balance Apr-01| 40000 40000 Apr-02 2400 37600 Apr 03 12001 26420 Apr-1011 2000 34400 Apr-141 1200133200 Apr 24 9500 42700 Apr-28 12001 41500 Apr-291 300141200 Apr-30 1300 39900 Apr-30 2100 37800 J.Nozomi Capital Date Debit Credit Balance Apr-01 65000 65000 Ih 337968379 li 2100 66279 HHHH Commnissions earned Date Debit Credit Balance Apr-24 9500 95.00 1750 11250 Computer equipment Date Debit Credit Balance Apr-01 25000 25000 Date Accumulated dep, computer Debit Credit Balance 3001 2001 Rent expense Date Debit Credit Balance Apr-2) 2400 24001 1 2400 Date d. Salaries cavable Debit Credit 460 Balance 460 Date Apr-03 b. Office supplies Debit Credit Balance 12000 12001 600 600 Date Apr-10 Prepaid insurance Debit Credit 2000 Balance 2000TTTTTT Salaries expense Date Debit Credit Apr-14 1200 Apr-28 1200 Id. 460 Balance 1200 2400 2850 Repairs expense Date Debit Credit Balance Apr-290 300 3001 3000 Telephone expense Date Debit Credit Balance Apr-30 1300 1300 13000 J. Nozomi Withdrawals Date Debit Credit Balance Apr-30 2100 2100 21000 Date Insurance expense Debit Credit Balance 11110 Date b. la Office supplies expense Debit Credit Balance 6001 600 6000 Date dep. Expense-computer Debit Credit Balance 3001 1 300 3001 0 Date le Accounts receivable Debit Credit 1750 Balance 1750

Unadjusted trial balance 37800 1 Adjustments 1 1750 600 111 1200 2000 25000 300 460 65000 1 2 Cash Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated dep.-computer Salaries payable J.Nozomi Capital J. Nozomi Withdrawals Commissions earned dep. Expense-computer Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense Total 100 1 Adjusted trial balance 37800 1750 600 1889 25000 300 460 65000 2100 11250 300 2860 1 11 2400 600 300 1300 77010 9500 1750 2400 300 460 1111 2400 600 300 1300 74500 74500 3221 3221 Income statement Commissions earned 11250 1 Less:expenses dep. Expense -computer Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense Total expenses 300 2860 1 11 2400 600 300 1300 7871 Net Income 3379 St. of Owners Equity Opening Balance Add: Introduction of capital Net Income 65000 3379 68379 Less: Dividends Closing balance D L 2100 66279

Balance sheet Cash Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated dep.-computer Total Assets 37800 1750 600 1889 25000 -300 24700 66739 Liabilities Salaries payable 460 Equity J. Nozomi Capital 66279 66279 66739 Total liabilties & equity Post closing trial balance Cash Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated dep.-computer Salaries payable J.Nozomi Capital 37800 1750 600 1889 25000 300 460 66279 total 67039 1 67039