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 $2,100 cash for the first month's (April) rent. 3 The company purchased $1,600 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 $1,400 cash for two weeks' salaries earned by employees. 24 The company collected $11,000 cash for commissions earned. 28 The company paid $1,400 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 $850 cash for this month's telephone bill. 38 Nozomi withdrew $1,600 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 382 3. 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 $161 has expired this month. b. At the end of the month, $400 of office supplies are still available. c. This month's depreciation on the computer equipment is $400. d. Employees earned $560 of unpaid and unrecorded salaries as of month-end. e. 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. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. Debit Credit $ 38,800 0 1,600 2,900 25,000 0 ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title 101: Cash 106: Accounts receivable 124: Office supplies 128: Prepaid insurarte 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 301: J. Nozomi, Capital 302: J. Nozomi, Withdrawals 405: Commissions earned 612: Depreciation expense-Computer equipment 622: Salaries expense 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total 0 65,000 1,600 11,000 0 2,800 0 2,100 0 350 850 76,000 $ $ 76,000 Req 1 and 2 Req 4 Ad] Entries > Using adjusted account balances from Requirement 6b, prepare an adjusted trial balance as of April 30. ADVENTURE TRAVEL Adjusted Trial Balance April 30 Account Title Debit Credit 1,550 1,600 2,900 25,000 400 560 65,000 101: Cash 106: Accounts receivable 124: Office supplies 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 301: J. Nozomi, Capital 302: J. Nozomi, Withdrawals 405: Commissions earned 612: Depreciation expense-Computer equipment 622: Salaries expense 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total 1,600 12,550 400 2,800 161 2,100 400 350 850 $ 39,711 $ 78,510 Req 4 Adj Entries Req 5A Prepare the income statement for the month of April 30. 12,550 ADVENTURE TRAVEL Income Statement For Month Ended April 30 Revenues: Commissions earned Expenses: Depreciation expense--Computer equip. Salaries expense Insurance expense Rent expense Office supplies expense Telephone expense Repairs expense 400 2,800 161 2,100 400 850 350 Total expenses Net income 7,061 5,489 $ Req 4 Adj Trial Bal Reg 58
