Problem 3 5A (Algo) Applying the accounting cycle LO P1, P3, P4, P5, P6 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 $34,000 cash and computer equipment worth $25,000 in the company in exchange for its common stock April 3 The company rented furnished office space by paying $2,400 cash for the first months (April) rent April 4 The company purchased $1,300 of office supplies for cash April 10 The company paid $2,160 cash for a 12 month insurance policy Coverage begins on April 11 April 14 The company paid $1,100 cash for two weeks' salaries earned by employees April 24 The company collected $13,000 cash for commissions revenue April 28 The company paid $1,100 cash for two weeks' salaries earned by employees April 29 The company paid $250 cash for minor repairs to computer equipment April 30 The company paid $1,400 cash for this month's telephone bill April 30 The company paid $1,510 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 $120 expired this month At the end of the month, $500 of office supplies are still available This months depreciation on computer equipment is $500 Employees earned $510 of unpaid and unrecorded salaries as of month end The company earned $2,400 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 Requirement 6B GL tab The company records prepaid and unearned items in balance sheet accounts 3 Using account balances from Requirement 6B GL tab, prepare an unadjusted trial balance as of April 30 4 Journalize the adjusting entries for the month, and then post to the ledger on Requirement 6B GL tab, using April 30 Adjusted as the date 5a Using adjusted account balances from Requirement 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 retained earnings 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 Requirement 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

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 15, 2024

Problem 3-5A (Algo) Applying the accounting cycle LO P1, P3, P4, P5, P6 On April 1, Jiro Nozomi created a new travel agency, Adventure Travel.

Problem 3-5A (Algo) Applying the accounting cycle LO P1, P3, P4, P5, P6

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 $34,000 cash and computer equipment worth $25,000 in the company in exchange for its common stock.
April 3	The company rented furnished office space by paying $2,400 cash for the first months (April) rent.
April 4	The company purchased $1,300 of office supplies for cash.
April 10	The company paid $2,160 cash for a 12-month insurance policy. Coverage begins on April 11.
April 14	The company paid $1,100 cash for two weeks' salaries earned by employees.
April 24	The company collected $13,000 cash for commissions revenue.
April 28	The company paid $1,100 cash for two weeks' salaries earned by employees.
April 29	The company paid $250 cash for minor repairs to computer equipment.
April 30	The company paid $1,400 cash for this month's telephone bill.
April 30	The company paid $1,510 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 $120 expired this month.
At the end of the month, $500 of office supplies are still available.
This months depreciation on computer equipment is $500.
Employees earned $510 of unpaid and unrecorded salaries as of month-end.
The company earned $2,400 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 Requirement 6B GL tab. The company records prepaid and unearned items in balance sheet accounts.

3. Using account balances from Requirement 6B GL tab, prepare an unadjusted trial balance as of April 30.

4. Journalize the adjusting entries for the month, and then post to the ledger on Requirement 6B GL tab, using April 30 Adjusted as the date.

5a. Using adjusted account balances from Requirement 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 retained earnings 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 Requirement 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

To address your query I will break down the steps and outline how each requirement can be fulfilled Here is how the financial information and steps for the travel agencys accounting entries trial bala... blur-text-image