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. April 2 The company rented furnished office space by paying $1,800 cash for the first month's (April) rent. April 3 The company purchased $1,000 of office supplies for cash. April 10 The company paid $2,400 cash for the premium on 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 $8,000 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 the company's computer. April 30 The company paid $750 cash for this month's telephone bill. April 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 Equipment 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends Use the following information: a. Prepaid Insurance of $133 has expired this month. 405 Commissions Revenue 612 Depreciation Expense-Computer Equipment 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary 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. General Ledger accounts 101: Cash Date Debit Credit Balance Date Date Date Date 124: Office Supplies Debit 106: Accounts Receivable Date Debit Credit Balance Credit Balance Date 128: Prepaid Insurance Debit Credit Balance 167: Computer Equipment Debit Credit Balance Date 168: Accumulated Depreciation-Computer Equip. Debit Credit Balance Credit Balance Date 307: Common Stock Debit Credit Balance 209: Salaries Payable Debit 318: Retained Earnings Debit Credit Balance Date 319: Dividends Debit Credit Balance Date Debit Credit Balance Date Debit Credit Balance Date Date Date 640: Rent Expense Debit 650: Office Supplies Expense Credit Balance Date Debit Credit Balance Credit Balance Date 688: Telephone Expense Debit Credit Balance 684: Repairs Expense Debit 901: Income Summary Debit Credit Balance Totals ADVENTURE TRAVEL Post-Closing Trial Balance April 30 Account Title Debit Credit 199 $ 0 S 0 Req 1 and 2 Req 3 Req 4 Adj Req 4 Adj Req 5A Req 5B Entries Req 5C Trial Bal Req 6A Req 6B GL Req 7 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. View transaction let View journal entry worksheet No Date General Journal 1 April 01 Cash Common stock Debit Credit 50,000 50,000 2 April 02 Rent expense 1,800 Cash 1,800 3 April 03 Office supplies 1,000 Cash 1,000 4 April 10 Prepaid insurance 2,400 Cash 2,400 5 April 14 Salaries expense Cash 1,600 1,600 100 April 24 Cash 8,000 Commissions revenue 8,000 7 April 28 Salaries expense 1,600 Cash 1,600 8 April 29 Repairs expense Cash 350 350 9 April 30 Telephone expense Cash 750 750 10 April 30 Dividends Cash < Req 1 and 2 Req 3 > 1,500 1,500 Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Trial Bal Req 5A Req 58 Req 5C Req 6A Req 6B GL Req 7 Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. 101: Cash 108: Accounts receivable 124: Office supplies ADVENTURE TRAVEL Unadjusted Trial Balance April 30 Account Title 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 307: Common stock 318: Retained earnings 319: Dividends 405: Commissions revenue 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 Debit Credit S 23,800 400 0 S 24,200 $ < Req 1 and 2 Req 4 Adj Entries > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Req 5A Trial Bal Req 5B Req 5C Req 6A Req 6B GL Req 7 Journalize the adjusting entries for the month, and then post to the ledger on Req 68 tab, using April 30 Adj. as the date. Note: Do not round intermediate calculations and round the final answers to nearest whole number. View transaction Net Journal entry worksheet < 1 2345 Prepaid insurance of $133 has expired this month. Note: Enter debits before credits. Transaction a. > General Journal Debit Credit Record entry Clear entry View general journal < Req 3 Req 4 Adj Trial Bal > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Req SA Trial Bal Req 5B Req SC Req 6A Req 6B GL Req 7 Using adjusted account balances from Requirement 6b, prepare an adjusted trial balance as of April 30. 101: Cash ADVENTURE TRAVEL Adjusted Trial Balance April 30 Account Title Debit Credit 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 revenue 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 $ 0 $ < Req 4 Adj Entries Req 5A > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Trial Bal Req 5A Req 58 Req 5C Req 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: Expenses: Total expenses 0 $ 0 < Req 4 Adj Trial Bal Req 5B > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Trial Bal Req 5A Req 5B Req 5C Req 6A Req 6B GL Req 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 $ 0 0 Retained earnings, April 30 $ 0 < Req 5A Req 5C > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Adj Entries Req 4 Adj Trial Bal Req SA Req 5B Req 5C Req 6A Req 6B GL Req 7 Prepare the balance sheet at April 30. ADVENTURE TRAVEL Total assets Balance Sheet April 30 0 $ 0 Total equity 0 Total liabilities and equity S 0 < Req 5B Req 6A > Journal entry worksheet 1 2 3 4 Record the entry to close the revenue account(s). Note: Enter debits before credits. Date April 30 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 4 Record the entry to close the income summary. Note: Enter debits before credits. Date April 30 Journal entry worksheet 1 2 3 4 Record the entry to close the expense account(s). Note: Enter debits before credits. Date April 30 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 Record the entry to close the dividends account. General Journal Debit Credit Note: Enter debits before credits. Date April 30 General Journal Debit Credit View general journal Record entry Clear entry Record entry Clear entry View general Journal