On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the companys first month.
| April | | 1 | | Nozomi invested $48,000 cash and computer equipment worth $25,000 in the company in exchange for common stock. |
| | | 2 | | The company rented furnished office space by paying $2,200 cash for the first months (April) rent. |
| | | 3 | | The company purchased $1,700 of office supplies for cash. |
| | | 10 | | The company paid $2,400 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 $16,000 cash for commissions earned. |
| | | 28 | | The company paid $1,300 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 $1,050 cash for this month's telephone bill. |
| | | 30 | | The company paid $1,500 cash in dividends. |
The company's chart of accounts follows:
| |
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation ExpenseComputer Equip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | Accumulated DepreciationComputer 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:
- Prepaid insurance of $133 has expired this month.
- At the end of the month, $700 of office supplies are still available.
- This months depreciation on the computer equipment is $400.
- Employees earned $350 of unpaid and unrecorded salaries as of month-end.
- The company earned $1,800 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.
No Date General Journal Credit 1 April 01 Cash Computer equipment Common stock bolo Debit 48,000 25,000 73.000 2 April 02 2.200 Rent expense Cash slo 2.200 3 April 03 Office supplies 1,700 ols Cash 1,700 4 April 10 2.400 > Prepaid insurance Cash slo 2,400 5 April 14 1.300 Salaries expense Cash sol 1,300 6 April 24 16,000 Cash Commissions earned DO 16,000 7 April 28 1,300 Salaries expense Cash olo 1.300 00 April 29 500 Repairs expense Cash O 9 April 30 1.050 Telephone expense Cash slo 1,050 10 April 30 1,500 Dividends Cash olol 1,500 Req 1 and 2 Reg 3 Rey 4 Adj Entries Req 4 Adj Trial Bal Req 5A Reg 5B Reg 5C Reg 6 Reg 6B GL Reg 7 Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. Debit Credit 52.050 1.700 2.400 25.000 ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title 101: Cash s 108: Accounts receivable 124: Office supplies 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 307: Common stock 318: Retained earnings 319: Dividends 405: Commissions earned 612: Depreciation expense-Computer equipment 622: Salaries expense 837: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total $ s 73.000 1,500 16,000 2,600 2.200 500 1,050 89,000 $ 89,000 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 is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Adj Entries Reg 4 Ad) Trial Bal Req 5A Req 5B Reg 5C Reg 6 Req 60 GL Req 7 Journalize the adjusting entries for the month, and then post to the ledger on Req 58 tab, using April 30 Adj. as the date. (Do not round intermediate calculations and round the final answers to nearest whole number.) No Transaction General Journal Debit Credit 1 a. 133 Insurance expense Prepaid insurance 133 2 2 b. 1,000 Office supplies expense Office supplies 1,000 3 400 Depreciation expense-Computer equip. Accumulated depreciation-Computer equip. 400 4 d. 350 Salaries expense Salaries payable olo 350 Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Ad] Trial Bal Reg SA Reg 5B Reg 5C Reg 6A Reg 6B GL Reg 7 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 Credit S Debit 52,050 1.800 700 2.267 25,000 $ 400 350 73.000 101: Cash 108: Accounts receivable 124: Office supplies 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 200: Salaries payable 307: Common stock 318: Retained earnings 319: Dividends 405: Commissions earned 612: Depreciation expense-Computer equipment 622 Salaries expense 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 1,500 17.800 400 2.950 132X 2.200 1,000 500 Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Adj Entries Reg 4 Adj Trial Bal Req 5A Req 5B Req 5C Reg 6A Req 6B GL Req 7 Prepare the income statement for the month of April 30. ADVENTURE TRAVEL Income Statement For Month Ended April 30 Revenues: Commissions earned > $ 17.800 Expenses: Rent expense Office supplies expense Insurance expense Salaries expense Repairs expense Telephone expense Depreciation expense Computer equip. OOOOOOO 2.200 1.000 133 2.950 133 x 1,050 400 Total expenses 7.886 9,934 $ Complete this question by entering your answers in the tabs below. Req 5B Reg 5C Reg 7 Req 1 and 2 Reg 3 Req 4 Adj Rey 4 Adj Req 5A Trial Bal Entries Req 6A Reg 6B GL Prepare the statement of retained earnings for the month of April 30. (Amounts to be deducted should be entered with a minus sign.) ADVENTURE TRAVEL Statement of Retained Earnings For Month Ended April 30 Retained earnings. April 1 S Add: Net Income 0 Less: Dividends Retained earnings, April 30 0 (1.500) (1.500) S Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Req5A Reg 5B Reg 5C Req 6A Reg 6B GL Reg 7 Prepare the balance sheet at April 30. ADVENTURE TRAVEL Balance Sheet April 30 Assets s Cash Accounts receivable Office supplies Prepaid insurance Computer equipment OOOOO 52,050 1.800 700 2.287 0 58,817 Total assets $ Liabilities Salaries payable > S 350 Equity Common stock Retained earnings olol Total equity Total liabilities and equity 0 350 $ Req 1 and 2 Req3 Req 4 Adj Entries Rey 4 Adj Trial Bal Req 5A Req 5B Req 5C Reg 6A Req6B GL Reg 7 Prepare journal entries to close the temporary accounts and then post to Req 58 General Ledger, using April 30 Close as the date. No General Journal Credit Date April 30 Debit 17.800 1 Commissions earned Income summary SISI 17.800 2 April 30 Rent expense Office supplies expense Insurance expense Salaries expense Repairs expense Telephone expense Depreciation expense-Computer equip. OOOOOO 2.200 1.000 133 2,950 500 1,050 400 3 April 30 9,587 Income summary Retained earnings olo 9,587 4 April 30 1,500 Income summary Dividends 1,500 Req 1 and 2 Reg 3 Req 4 Ad] Entries Reg 4 Ad] Trial Bal Req 5A Reg 5B Reg 5C Req 6A Req6B GL Req ? Reg 7 Post the journal entries to the ledger. General Ledger accounts 101: Cash Debit 48.000 Credit Date April 30 Adj. 106: Accounts Receivable Debit Credit 1,800 Balance 1,800 Date April 1 April 2 April 3 April 10 April 14 April 28 April 29 April 30 April 30 April 24 OOOOOOOOO 2.200 1,700 2,400 1,300 1,300 500 1,050 1,500 Balance 48,000 45,800 44,100 41.700 40,400 39.100 38,600 37.550 38,050 52.050 16.000 Date April 3 124: Office Supplies Debit Credit 1.700 Balance 1,700 Date April 10 128: Prepaid Insurance Debit Credit 2.400 Balance 2,400 167: Computer Equipment Debit Credit 25,000 168: Accumulated Depreciation Computer equipment Date Debit Credit Balance Date Balance 25,000 April 1 > 209: Salaries Payable 307: Common Stock Date April 30 Adi 209: Salaries Payable Debit Credit 350 Balance 350 Date April 1 307: Common Stock Debit Credit 73.000 Balance 73.000 o 318: Retained Earnings Debit Credit Date Balance Date April 30 319: Dividends Debit Credit 1,500 Balance 1,500 405: Commissions Earned Debit Credit 17.800 16,000 1.800 Date April 30 Close April 24 April 30 Adj. 612: Depreciation Expense-Computer Equipment Date Debit Credit Balance April 30 Adj. 400 400 Balance (17.800) (1.800) 0 Date April 30 Adj. 622: Salaries Expense Debit Credit 1,300 1,300 350 637: Insurance Expense Debit Credit 133 Balance 133 Date April 14 April 28 April 30 Adj. . OOO Balance 1,300 2,600 2.950 Date April 2 640: Rent Expense Debit Credit 2.200 Balance 2.200 Date April 30 Adj. 650: Office Supplies Expense Debit Credit 1.000 Balance 1,000 622: Salaries Expense Debit Credit 1,300 1,300 350 637: Insurance Expense Debit Credit 133 Date April 30 Adj. Date April 14 April 28 April 30 Adj. Balance 133 Balance 1,300 2,600 2.950 DO Date 640: Rent Expense Debit Credit 2.200 Balance 2.200 650: Office Supplies Expense Debit Credit 1,000 Date April 30 Adj. Balance 1.000 > April 2 684: Repairs Expense Debit Credit 500 Date April 29 Expense Credit Balance 500 688: Telepho Debit 1,050 Date April 30 Balance 1,050 >> 901: Income Summary Debit Credit Date Balance X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Ad Trial Bal Req 5A Req 50 Reg 5C Raq 6A Req 6A Reg 6B GL Reg 7 Prepare a post-closing trial balance. Debit ADVENTURE TRAVEL Post-Closing Trial Balance April 30 Account Title Common stock Retained earnings Salaries payable Accumulated depreciation-Computer equip. Computer equipment Cash Accounts receivable Office supplies Prepaid insurance Credit 73,000 8,087 350 400 25,000 52.050 1.800 700 2.287 Totals $ 81.817 $ 81.817
