Problem 3-5A (Static) 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. REQ 6A, 6B GL & 7 NEEDED ONLY

April 2	Nozomi invested $30,000 cash and computer equipment worth $20,000 in the company in exchange for its common stock.
April 3	The company rented furnished office space by paying $1,800 cash for the first month's (April) rent.
April 4	The company purchased $1,000 of office supplies for cash.
April 10	The company paid $2,400 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 $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 computer equipment.
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	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:

1. Prepaid insurance of $133 expired this month.
2. At the end of the month, $600 of office supplies are still available.
3. This months depreciation on computer equipment is $500.
4. Employees earned $420 of unpaid and unrecorded salaries as of month-end.
5. The company earned $1,750 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.

Req 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Prepare journal entries to record the transactions for April and post them to ledger accounts in Req 6B GL tab. The company records prepaid and unearned items in balance sheet accounts. View transaction list View journal entry worksheet General Journal Credit No 1 Date April 02 Cash Computer equipment Common stock Debit 30,000 20,000 50,000 April 03 1,800 N Rent expense Cash 1,800 3 April 04 1,000 Office supplies Cash 1,000 4 April 10 2,400 Prepaid insurance Cash 2.400 5 5 April 14 1,600 Salaries expense Cash 1,600 6 6 April 24 8,000 Cash Commissions revenue 8,000 7 April 28 1,600 Salaries expense Cash 1,600 8 April 29 350 Repairs expense Cash 350 9 April 30 750 Telephone expense Cash 750 10 April 30 Dividends 1,500 Cash 1,500 Req 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Using account balances from Requirement 6B GL tab, prepare an unadjusted trial balance as of April 30. Debit Credit $ 27,000 0 1.000 2,400 20,000 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 403: 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 Totals 0 50,000 0 1,500 8,000 0 3,200 0 1,800 0 350 750 58,000 $ $ 58,000 Req 1 and 2 Req3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 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. (Do not round intermediate calculations and round the final answers to nearest whole number.) View transaction list View journal entry worksheet :..... No General Journal Debit Credit Transaction a. 1 133 Insurance expense Prepaid insurance 133 2 b. 400 Office supplies expense Office supplies 400 3 C. 500 Depreciation expense-Computer equipment Accumulated depreciation-Computer equipment 500 4 4 d. 420 Salaries expense Salaries payable 420 5 e. 1,750 Accounts receivable Commissions revenue 1,750 Req 1 and 2 Req3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Using adjusted account balances from Requirement 6B GL tab, prepare an adjusted trial balance as of April 30. Debit Credit ADVENTURE TRAVEL Adjusted 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 403: 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 Totals $ 0 $ 0 Req 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Reg 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 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D 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 Retained earnings, April 30 $ 0 Req 1 and 2 Req3 Req 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Prepare the balance sheet at April 30. ADVENTURE TRAVEL Balance Sheet April 30 0 Total assets $ 0 0 Total equity Total liabilities and equity 0 Req 1 and 2 Reg 3 Req 4 Req 5A Req 5B Req 5C Reg 5D Req 6A Req 6B GL Req 7 Prepare journal entries to close the temporary accounts and then post to Requirement 6B GL tab, using April 30 Close as the date. View transaction list Journal entry worksheet Record the entry to close the revenue account(s). Note: Enter debits before credits. General Journal Debit Credit Date April 30 Record entry Clear entry View general journal Req 1 and 2 Reg 3 Req 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Prepare journal entries to close the temporary accounts and then post to Requirement 6B GL tab, using April 30 Close as the date. View transaction list Journal entry worksheet Record the entry to close the expense account(s). Note: Enter debits before credits. General Journal Debit Credit Date April 30 Record entry Clear entry View general journal Req 1 and 2 Req 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Prepare journal entries to close the temporary accounts and then post to Requirement 6B GL tab, using April 30 Close as the date. View transaction list Journal entry worksheet Record the entry to close the income summary. Note: Enter debits before credits. General Journal Debit Credit Date April 30 Record entry Clear entry View general journal Req 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Reg 6B GL Reg 7 Prepare journal entries to close the temporary accounts and then post to Requirement 6B GL tab, using April 30 Close as the date. View transaction list Journal entry worksheet Record the entry to close the dividends account. Note: Enter debits before credits. General Journal Debit Credit Date April 30 Record entry Clear entry View general journal Req 1 and 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Req 5D Req 6A Req 6B GL Reg 7 Post the journal entries to the ledger. (Select April 30 Adjusted as date for all adjusting entries, and April 30 Close as date for all closing en General Ledger accounts 106: Accounts receivable 101: Cash Debit Date Credit Balance Date Debit Credit Balance 124: Office supplies Debit Credit 128: Prepaid insurance Debit Credit Date Balance Date Balance 167: Computer equipment Debit Credit 168: Accumulated depreciation-Computer equipment Date Debit Credit Balance Date Balance 209: Salaries payable Debit Credit 307: Common stock Debit Credit Date Balance Date Balance 318: Retained earnings Debit Credit 319: Dividends Debit Date Balance Date Credit Balance 403: Commissions revenue Debit Credit 612: Depreciation expense-Computer equipment Date Debit Credit Balance Date Balance 622: Salaries expense Debit Credit 637: Insurance expense Debit Credit Date Balance Date Balance 640: Rent expense Debit Credit 650: Office supplies expense Debit Credit Date Balance Date Balance 684: Repairs expense Debit Credit 688: Telephone expense Debit Credit Date Balance Date Balance 901: Income summary Debit Credit Date Balance Req 1 and 2 Reg 3 Reg 4 Req 5A Reg 5B Req 5C Req 5D Req 6A Req 6B GL Req 7 Prepare a post-closing trial balance. ADVENTURE TRAVEL Post-Closing Trial Balance April 30 Account Title Debit Credit Totals $ 0 $ 0