Problem 3-5A (Static) Applying the accounting cycle LO P1, P2, P3, P4, P5, P6 On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 1 Nozomi invested $30.000 cash and computer equipment worth $20.000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $1,800 cash for the first month's (April) rent. 3 The company purchased $1,000 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 $1,600 cash for two weeks' salaries earned by employees. 24 The company collected $8.000 cash for commissions revenue. 28 The company paid $1,600 cash for two weeks' salaries earned by employees. 29 The company paid $850 cash for minor repairs to the company's computer. 30 The company paid $750 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 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation Computer Equip. 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Revenue 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 Income Summary Use the following Information: a. Prepaid Insurance of $133 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 $500. d. Employees earned $420 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,750 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. Reg 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adi Trial Bal Reg SA Reg 5B Reg 5C Reg 6A Req 6B GL Reg 7 Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title Debit Credit 101: Cash S 27,000 106: Accounts receivable 0 124: Office supplies 1,000 128: Prepaid insurance 2.400 167: Computer equipment 20.000 168: Accumulated depreciation-Computer equipment 0 209: Salaries payable 0 307: Common stock $ 50,000 318: Retained earnings 2.400 319: Dividends 405: Commissions revenue 8,000 612: Depreciation expense-Computer equipment 0 622: Salaries expense 3.200 637: Insurance expense 0 640: Rent expense 1,800 650: Office supplies expense 0 684: Repairs expense 350 688: Telephone expense 750 Total S 58.900 $ 58,000 X Reg 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A 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 Debit Credit 101: Cash S 27,000 106: Accounts receivable 0 124: Office supplies 1,000 % 128: Prepaid insurance 2,400 167: Computer equipment 20,000 168: Accumulated depreciation-Computer equipment $ 0X 209: Salaries payable 0 X 307. Common stock 50.000 318: Retained earnings 1,500 319: Dividends 8,000 405: Commissions revenue 0 612: Depreciation expense-Computer equipment 0 622: Salaries expense 3,200 637: Insurance expense 0 640: Rent expense 1,800 650: Office supplies expense 0 684: Repairs expense 350 688: Telephone expense 750 Total S 58,000 $ 58,000 X Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Req 6A Reg 6B GL Reg 7 Prepare the income statement for the month of April 30. ADVENTURE TRAVEL Income Statement For Month Ended April 30 Revenues: Commissions revenue 9.750 500 3,620 133 Expenses: Depreciation expense-Computer equip. Salaries expense Insurance expense Rent expense Office supplies expense Telephone expense Office supplies expense OOOO OOOOO 1.800 400 750 350 Total expenses 7,553 2,197 S Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Adj Entries Reg 4 Adj Trial Bal Req 5A Req 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Prepare the statement of retained earnings for the month of April 30. ADVENTURE TRAVEL Statement of Retained Earnings For Month Ended April 30 Retained earnings, April 1 Add: Net income 52,197 52. 197 1,500 Retained earnings, April 30 S 50,697 S 0 Less: Dividends Reg 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A Reg 5B Req 50 Reg 6A Reg 6B GL Reg 7 Prepare the balance sheet at April 30. S 27.000 1,750 ADVENTURE TRAVEL Balance Sheet April 30 Assets Cash Accounts receivable Office supplies Prepaid insurance Computer equipment $ Accumulated depreciationComputer equip. Total assets Liabilities Salaries payable 600 2.267 20,000 (500) 19,500 51,117 S S 420 Equity Common stock 50,697 X Total equity Total liabilities and equity 50,697 51,117 $ Reg 1 and 2 Reg 3 Req 4 Adj Entries Req 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Prepare journal entries to close the temporary accounts and then post to Req 6B General Ledger, using April 30 Close as the date. No Date General Journal Debit Credit 1 April 30 9.750 Commissions revenue Income summary >> 9.750 2 April 30 7,553 500 3,620 Income summary Depreciation expenseComputer equip. Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense >>>>>> 133 1,800 400 350 750 3 April 30 2,197 Income summary Common stock x 2,197 4 April 30 Common stock 1,500 OX Dividends 1,500 101: Cash Date Credit Debit 30,000 Date April 30 Adj. 106: Accounts Receivable Debit Credit 1,750 Balance 1,750 1,800 1,000 2.400 1,600 April 1 April 2 April 3 April 10 April 14 April 24 April 28 April 29 April 30 April 30 Balance 30,000 28,200 27,200 24,800 23,200 31,200 29,600 29,250 28,500 27,000 8,000 1,600 350 750 1,500 Date April 3 April 30 Adj. 124: Office Supplies Debit Credit 1,000 600 Balance 1,000 128: Prepaid Insurance Debit Credit 2.400 Date April 10 April 30 Adj. Balance 2.400 OO 400 Date April 1 167: Computer Equipment Debit Credit 20.000 Balance 20,000 Date April 30 Adj. 168: Accumulated Depreciation-Computer Equip. Debit Credit Balance 500 500 209: Salaries Payable Debit Credit Date Balance 307: Common Stock Debit Credit 50,000 Date April 1 Balance April 30 Adj. 420 420 50.000 318: Retained Earnings Debit Credit 1,500 319: Dividends Debit Credit Balance Date April 30 Balance Date April 30 X (1,500) 405: Commissions Revenue Date Debit Credit 8,000 1,750 Balance 8,000 9,750 612: Depreciation Expense-Computer Equip. Date Debit Credit Balance April 30 Adj. 500 500 April 30 Close 622: Salaries Expense Debit Credit Balance 637: Insurance Expense Debit Credit 200 X Date April 14 April 28 April 30 Adj. April 30 Close Date April 30 Adj. April 30 Close Balance 200 X X X 200 0 640: Rent Expense Debit Credit 650: Office Supplies Expense Debit Credit Date Balance Date Balance 1,800 1,800 April 30 Adj. April 2 April 30 Close 1,800 0 684: Repairs Expense Debit Credit 688: Telephone Expense Debit Credit Balance Balance Date April 29 April 30 Close Date April 30 April 30 Close 901: Income Summary Debit Credit Balance X Date April 30 April 30 Adj. April 30 Close X x Req 1 and 2 Reg 3 Reg 4 Adi Entries Req 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Credit Debit 30,000 1.800 Prepare a post-closing trial balance. ADVENTURE TRAVEL Post-Closing Trial Balance April 30 Account Title Cash S Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated depreciation-Computer equip. Salaries payable Common stock Retained earnings 1,000 X 2,400 1,600 8.000 x X Totals $ 44.800 S 0 Problem 3-5A (Static) Applying the accounting cycle LO P1, P2, P3, P4, P5, P6 On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 1 Nozomi invested $30.000 cash and computer equipment worth $20.000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $1,800 cash for the first month's (April) rent. 3 The company purchased $1,000 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 $1,600 cash for two weeks' salaries earned by employees. 24 The company collected $8.000 cash for commissions revenue. 28 The company paid $1,600 cash for two weeks' salaries earned by employees. 29 The company paid $850 cash for minor repairs to the company's computer. 30 The company paid $750 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 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation Computer Equip. 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Revenue 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 Income Summary Use the following Information: a. Prepaid Insurance of $133 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 $500. d. Employees earned $420 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,750 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. Reg 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adi Trial Bal Reg SA Reg 5B Reg 5C Reg 6A Req 6B GL Reg 7 Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title Debit Credit 101: Cash S 27,000 106: Accounts receivable 0 124: Office supplies 1,000 128: Prepaid insurance 2.400 167: Computer equipment 20.000 168: Accumulated depreciation-Computer equipment 0 209: Salaries payable 0 307: Common stock $ 50,000 318: Retained earnings 2.400 319: Dividends 405: Commissions revenue 8,000 612: Depreciation expense-Computer equipment 0 622: Salaries expense 3.200 637: Insurance expense 0 640: Rent expense 1,800 650: Office supplies expense 0 684: Repairs expense 350 688: Telephone expense 750 Total S 58.900 $ 58,000 X Reg 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A 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 Debit Credit 101: Cash S 27,000 106: Accounts receivable 0 124: Office supplies 1,000 % 128: Prepaid insurance 2,400 167: Computer equipment 20,000 168: Accumulated depreciation-Computer equipment $ 0X 209: Salaries payable 0 X 307. Common stock 50.000 318: Retained earnings 1,500 319: Dividends 8,000 405: Commissions revenue 0 612: Depreciation expense-Computer equipment 0 622: Salaries expense 3,200 637: Insurance expense 0 640: Rent expense 1,800 650: Office supplies expense 0 684: Repairs expense 350 688: Telephone expense 750 Total S 58,000 $ 58,000 X Req 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Req 6A Reg 6B GL Reg 7 Prepare the income statement for the month of April 30. ADVENTURE TRAVEL Income Statement For Month Ended April 30 Revenues: Commissions revenue 9.750 500 3,620 133 Expenses: Depreciation expense-Computer equip. Salaries expense Insurance expense Rent expense Office supplies expense Telephone expense Office supplies expense OOOO OOOOO 1.800 400 750 350 Total expenses 7,553 2,197 S Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Adj Entries Reg 4 Adj Trial Bal Req 5A Req 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Prepare the statement of retained earnings for the month of April 30. ADVENTURE TRAVEL Statement of Retained Earnings For Month Ended April 30 Retained earnings, April 1 Add: Net income 52,197 52. 197 1,500 Retained earnings, April 30 S 50,697 S 0 Less: Dividends Reg 1 and 2 Reg 3 Req 4 Adj Entries Reg 4 Adj Trial Bal Reg 5A Reg 5B Req 50 Reg 6A Reg 6B GL Reg 7 Prepare the balance sheet at April 30. S 27.000 1,750 ADVENTURE TRAVEL Balance Sheet April 30 Assets Cash Accounts receivable Office supplies Prepaid insurance Computer equipment $ Accumulated depreciationComputer equip. Total assets Liabilities Salaries payable 600 2.267 20,000 (500) 19,500 51,117 S S 420 Equity Common stock 50,697 X Total equity Total liabilities and equity 50,697 51,117 $ Reg 1 and 2 Reg 3 Req 4 Adj Entries Req 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Prepare journal entries to close the temporary accounts and then post to Req 6B General Ledger, using April 30 Close as the date. No Date General Journal Debit Credit 1 April 30 9.750 Commissions revenue Income summary >> 9.750 2 April 30 7,553 500 3,620 Income summary Depreciation expenseComputer equip. Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense >>>>>> 133 1,800 400 350 750 3 April 30 2,197 Income summary Common stock x 2,197 4 April 30 Common stock 1,500 OX Dividends 1,500 101: Cash Date Credit Debit 30,000 Date April 30 Adj. 106: Accounts Receivable Debit Credit 1,750 Balance 1,750 1,800 1,000 2.400 1,600 April 1 April 2 April 3 April 10 April 14 April 24 April 28 April 29 April 30 April 30 Balance 30,000 28,200 27,200 24,800 23,200 31,200 29,600 29,250 28,500 27,000 8,000 1,600 350 750 1,500 Date April 3 April 30 Adj. 124: Office Supplies Debit Credit 1,000 600 Balance 1,000 128: Prepaid Insurance Debit Credit 2.400 Date April 10 April 30 Adj. Balance 2.400 OO 400 Date April 1 167: Computer Equipment Debit Credit 20.000 Balance 20,000 Date April 30 Adj. 168: Accumulated Depreciation-Computer Equip. Debit Credit Balance 500 500 209: Salaries Payable Debit Credit Date Balance 307: Common Stock Debit Credit 50,000 Date April 1 Balance April 30 Adj. 420 420 50.000 318: Retained Earnings Debit Credit 1,500 319: Dividends Debit Credit Balance Date April 30 Balance Date April 30 X (1,500) 405: Commissions Revenue Date Debit Credit 8,000 1,750 Balance 8,000 9,750 612: Depreciation Expense-Computer Equip. Date Debit Credit Balance April 30 Adj. 500 500 April 30 Close 622: Salaries Expense Debit Credit Balance 637: Insurance Expense Debit Credit 200 X Date April 14 April 28 April 30 Adj. April 30 Close Date April 30 Adj. April 30 Close Balance 200 X X X 200 0 640: Rent Expense Debit Credit 650: Office Supplies Expense Debit Credit Date Balance Date Balance 1,800 1,800 April 30 Adj. April 2 April 30 Close 1,800 0 684: Repairs Expense Debit Credit 688: Telephone Expense Debit Credit Balance Balance Date April 29 April 30 Close Date April 30 April 30 Close 901: Income Summary Debit Credit Balance X Date April 30 April 30 Adj. April 30 Close X x Req 1 and 2 Reg 3 Reg 4 Adi Entries Req 4 Adj Trial Bal Reg 5A Reg 5B Reg 5C Reg 6A Reg 6B GL Reg 7 Credit Debit 30,000 1.800 Prepare a post-closing trial balance. ADVENTURE TRAVEL Post-Closing Trial Balance April 30 Account Title Cash S Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated depreciation-Computer equip. Salaries payable Common stock Retained earnings 1,000 X 2,400 1,600 8.000 x X Totals $ 44.800 S 0
