Question

1 April 1 Nozomi invested $31,000 cash and computer equipment worth $25,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $2,900 cash for the first month's (April) rent. 3 The company purchased $1,900 of office supplies for cash. 10 The company paid $2,900 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,500 cash for two weeks' salaries earned by employees. 24 The company collected $18,000 cash for commissions earned. 28 The company paid $1,500 cash for two weeks' salaries earned by employees. 29 The company paid $500 cash for minor repairs to the company's computer. 30 The company paid $1,100 cash for this month's telephone bill. 30 The company paid $2,200 cash in dividends. Print 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 307 Common Stock 318 Retained Earnings 319 Dividends 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 $161 has expired this month. b. At the end of the month, $700 of office supplies are still available c. This month's depreciation on the computer equipment is $600. d. Employees earned $390 of unpaid and unrecorded salaries as of month-end, e. The company earned $2,000 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.

Answer 1

Adventure Travel Journal Enteries Date Particulars 1.4.2017 Cash a/c Dr. Computer a/c Dr. To J.Nozomi, Capital (Capital Invested) Debit in $ Credit in $ 31000 25000 56000 Dr. 2900 2.4.2017 Rent Expense a/c To Cash (Rent paid in cash) 2900 Dr. 1900 3.4.2017 Office Supplies a/c To Cash (Office Supplies purchased n cash) 1900 2900 10.4.2017 Prepaid Insurance a/c Dr. To Cash (one year insurance paid in cash) 2900 Dr. 1500 14.4.2017 Salaries Expense a/c To Cash (Salary paid in cash) 1500 18000 24.4.2017 Cash a/c Dr. To Commission Earned (Commission earned on Flight tickets) 18000 Dr. 1500 28.4.2017 Salaries Expense a/c To Cash (Salary paid in cash) 1500 Dr. 500 29.4.2017 Repairs Expense a/c To Cash (Computer repairs in cash) 500 1100 30.4.2017 Telephone Expense a/c Dr. To Cash (Telephone Expense paid in cash) 1100 2200 30.4.2017 Dividends a/c Dr. To Cash (Cash drawn for personal use) 2200

Adjustment Enteries Date Particulars 30.4.2017 Insurance Expense a/c To Prepaid Insurance (Insurance expense charged) Dr. Debit in $ Credit in $ 161 161 Dr. 1200 30.4.2017 Supplies Expense a/c To Supplies (Supplies Expensed) 1900 - 700 = 1200 1200 600 30.4.2017 Depreciation Expense - Computer a/c Dr. To Accum. Depre - Computer (Depreciation charged to Computer) 600 Dr. 390 30.4.2017 Salaries Expense a/c To Salaries Payable (Salary expense accrued) 390 Dr. 2000 30.4.2017 Accounts Receivable a/c To Commission Earned (Commission revenue accrued) 2000 Closing Enteries Date Particulars Debit in $ Credit in $ 30.4.2017 Income Summary a/c Dr. 9851 To Rent Expense 2900 To Salaries Expense 3390 To Repairs Expense 500 To Telephone Expense 1100 To Insurance Expense 161 To Supplies Expense 1200 600 To Depreciation Expense - Computer (Expense accounts closed) Dr. 20000 30.4.2017 Commission Earned a/c To Income Summary (Revenue accounts Closed) 20000 Dr. 10149 30.4.2017 Income Summary a/c To Retained Earnings (Profits Transferred ) 10149 Dr. 2200 30.4.2017 Retained Earnings a/c To Dividends (Dividend account closed) 2200

Trial Balance For the month ending 30.4.2017 2000 Unadjusted Adjustment Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 34500 34500 34500 2000 2000 2900 161 2739 2739 1900 1200 700 700 25000 25000 25000 600 600 600 390 390 390 56000 56000 56000 7949 Acct.No. Particulars 101 Cash 106 Accounts Receivable 128 Prepaid Insurance 124 Office Supplies 167 Computer 168 Accum. Depre - Computer 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commission Earned 640 Rent Expense 622 Salaries Expense 684 Repairs Expense 688 Telephone Expense 637 Insurance Expense 650 Office Supplies Expense 612 Depreciation Expense - Computer Totals 2200 2200 18000 2000 20000 2900 3000 2900 3390 390 500 500 1100 161 1100 161 1200 600 1200 600 74000 74000 4351 4351 76990 76990 64939 64939

Amounts in $ Amounts in $ Balance sheet As at 30.4.2017 Assets Current Assets Cash Accounts Receivable Prepaid Insurance Office Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 34500 Salaries Payable 2000 390 2739 700 39939 25000 56000 Non Current Assets Computer Accum. Depre - Computer Total Assets Shareholders Equity Common Stock 24400 Retained Earnings 64339 Total Liabilities & equity -600 7949 63949 64339 20000 2900 3390 Statement of Income For the month ending 30.4.2017 Commission Earned Less: Rent Expense Salaries Expense Repairs Expense Telephone Expense Insurance Expense Supplies Expense Depreciation Expense - Cor Net Income 500 1100 161 1200 600 9851 10149 Statement of Retained Earnings For the month ending 30.4.2017 Beginning Balance Net Income Dividends 0 10149 -2200 7949