Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the companys first month. April 2 Nozomi invested

On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the companys first month.

April 2 Nozomi invested $31,000 cash and computer equipment worth $25,000 in the company.
April 3 The company rented furnished office space by paying $2,800 cash for the first months (April) rent.
April 4 The company purchased $2,000 of office supplies for cash.
April 10 The company paid $2,800 cash for a 12-month insurance policy. Coverage begins on April 11.
April 14 The company paid $1,000 cash for two weeks' salaries earned by employees.
April 24 The company collected $9,000 cash for commissions revenue.
April 28 The company paid $1,000 cash for two weeks' salaries earned by employees.
April 29 The company paid $450 cash for minor repairs to computer equipment.
April 30 The company paid $750 cash for this month's telephone bill.
April 30 Nozomi withdrew $2,200 cash from the company for personal use.

The company's chart of accounts follows:

101 Cash 403 Commissions Revenue
106 Accounts Receivable 612 Depreciation ExpenseComputer Equipment
124 Office Supplies 622 Salaries Expense
128 Prepaid Insurance 637 Insurance Expense
167 Computer Equipment 640 Rent Expense
168 Accumulated DepreciationComputer Equipment 650 Office Supplies Expense
209 Salaries Payable 684 Repairs Expense
301 J. Nozomi, Capital 688 Telephone Expense
302 J. Nozomi, Withdrawals 901 Income Summary

Use the following information to prepare adjusting entries:

  1. Prepaid insurance of $156 expired this month.
  2. At the end of the month, $600 of office supplies are still available.
  3. This months depreciation on computer equipment is $600.
  4. Employees earned $460 of unpaid and unrecorded salaries as of month-end.
  5. The company earned $1,550 of commissions revenue that is not yet recorded at month-end.

Required:

1. & 2. Prepare journal entries to record the transactions for April and post them to ledger accounts in Req 6B GL tab. 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 then post to the ledger on Req 6B tab, using April 30 Adjusted as the date.

5a. Using adjusted account balances from Req 6B GL tab, prepare an adjusted trial balance as of April 30.

5b. Prepare the income statement for the month of April 30.

5c. Prepare the statement of owner's equity for the month of April 30.

5d. Prepare the balance sheet at April 30.

6a. Prepare journal entries to close the temporary accounts and then post to Req 6B GL tab, using April 30 Close as the date.

6b. Post the journal entries to the ledger.

7. Prepare a post-closing trial balance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Auditing Research Tools And Strategies

Authors: Thomas Weirich, Thomas C. Pearson, Alan Reinstein

6th Edition

032430224X, 9780324302240

More Books

Students also viewed these Accounting questions

Question

I had a problem last week; they would think I am picky or a whiner!

Answered: 1 week ago