Question
Prepare the income statement for the month of April 30. On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions
Prepare the income statement for the month of April 30.
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 $32,000 cash and computer equipment worth $35,000 in the company in exchange for its common stock. |
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April 3 | The company rented furnished office space by paying $1,600 cash for the first months (April) rent. |
April 4 | The company purchased $1,100 of office supplies for cash. |
April 10 | The company paid $2,880 cash for a 12-month insurance policy. Coverage begins on April 11. |
April 14 | The company paid $1,600 cash for two weeks' salaries earned by employees. |
April 24 | The company collected $13,000 cash for commissions revenue. |
April 28 | The company paid $1,600 cash for two weeks' salaries earned by employees. |
April 29 | The company paid $350 cash for minor repairs to computer equipment. |
April 30 | The company paid $1,350 cash for this month's telephone bill. |
April 30 | The company paid $1,540 cash in dividends. |
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 |
307 | Common Stock | 688 | Telephone Expense |
318 | Retained Earnings | 901 | Income Summary |
319 | Dividends |
Use the following information to prepare adjusting entries:
Prepaid insurance of $160 expired this month.
At the end of the month, $500 of office supplies are still available.
This months depreciation on computer equipment is $300.
Employees earned $520 of unpaid and unrecorded salaries as of month-end.
The company earned $2,100 of commissions revenue that is not yet recorded at month-end.
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