Problem 3-5A Applying the accounting cycle LO P1, P2, P3, P4, P5, P6, P7, P8 On April 1. Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month April 1 Nozom invested $32,000 cash and computer equipment worth $30,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $2.500 cash for the first month's (April) rent. 3 The company purchased $1,400 of office supplies for cash. 10 The company paid $2,300 cash for the premium on 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,700 cash for two weeks' salaries earned by employees 24 The company collected $12,000 cash for commissions earned. 28 The company paid $1,700 cash for two weeks' salaries earned by employees 29 The company paid $300 cash for minor repairs to the company's computer 30 The company paid $1,300 cash for this month's telephone bill 10 The company paid $2.40 cash in dividends The company's chart of accounts follows 101 Cash 106 Accounts Receivable 124 Office Supplies 121 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation Computer Equip 209 Salaries Payable 307 Common Stock 31 Retained Earnings 319 Dividends 405 Comissions 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 Incone Summary Use the following information a. Prepaid insurance of $128 has expired this month. b. At the end of the month, $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $300. d. Employees earned $360 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,900 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. Sb. 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. Debit Credit 1,400 2,300 30,000 62,000 ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title 101: Cash 106: 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 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total 2,400 36,100 $ 62,000 Journal entry worksheet 1 2 3 4 5 Prepaid Insurance of $128 has expired this month. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general Journal Journal entry worksheet This month's depreciation on the computer equipment is $300. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal ADVENTURE TRAVEL Adjusted Trial Balance April 30 Account Title Debit Credit 101: Cash 106: 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 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Tata ADVENTURE TRAVEL Income Statement For Month Ended April 30 Revenues: Expenses: Total expenses $ 0 Prepare the statement of retained earnings for the month of April 30. (Amounts to be dedu minus sign.).................. ADVENTURE TRAVEL Statement of Retained Earnings For Month Ended April 30 Retained earnings, April 1 0 0 Retained earnings, April 30 $ 0 balance sheet at April 30. ADVENTURE TRAVEL Balance Sheet April 30 0 Total assets $ 0 0 Total equity Total liabilities and equity S 0 View transaction list Journal entry worksheet 1 2 3 4 > Record the entry to close the revenue account(s). Note: Enter debits before credits Date General Journal Debit Credit April 30 Record entry Clear entry View general Journal Journal entry worksheet Record the entry to close the income summary Note: Enter debits before credits Date General Journal Debit Credit April 30 Record entry Clear entry View general Journal Journal entry worksheet
