On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. 1 Nozomi invested $45,000 cash and computer equipment worth $20,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $2,500 cash for the first month's (April) rent. 3 The company purchased $1,300 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. April 14 The company paid $1,700 cash for two weeks' salaries earned by employees. 24 The company collected $15,500 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 $1,050 cash for this month's telephone bill. 30 The company paid $1,700 cash in dividends. The company's chart of accounts follows: 405 Commissions Earned 101 Cash 106 Accounts Receivable 612 Depreciation Expense-Computer Equip. 622 Salaries Expense 124 Office Supplies 128 Prepaid Insurance 637 Insurance Expense 167 Computer Equipment 168 Accumulated Depreciation-Computer Equip. 209 Salaries Payable 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary 307 Common Stock 318 Retained Earnings 319 Dividends Use the following information: a. Prepaid insurance of $133 has expired this month. b. At the end of the month, $500 of office supplies are still available. c. This month's depreciation on the computer equipment is $600. d. Employees earned $340 of unpaid and unrecorded salaries as of month-end. e. The company earned $2,200 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. View transaction list View journal entry worksheet No Date General Journal Debit Credit April 01 Cash 45,000 20,000 Computer equipment Common stock 65,000 2,500 Rent expense April 02 Cash 2,500 1,300 Office supplies 3 April 03 Cash 1,300 April 10 Prepaid insurance 4 2,400 Cash 2,400 April 14 Salaries expense 1,700 1,700 Cash April 24 15,500 Cash Commissions earned 15,500 Salaries expense 1,700 April 28 Cash 1,700 April 29 Repairs expense 300 Cash 300 April 30 Telephone expense 1,050 Cash 1,050 ADVENTURE TRAVEL Unadjusted 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 Total > Req 4 Adj Entries K Req 1 and 2 Journal entry worksheet 2 4 Prepaid insurance of $133 has expired this month. Note: Enter debits before credits. Transaction Credit General Journal Debit a. Record entry Clear entry View general journal Req 4 Adj Trial Bal Req 3 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 Total
