GL0305 (Algo) - Based on Problem 3-5A LO P1, P3, P4, P5, P6 On April 1, Rick Mitchell created a new travel agency, Mitchell Travel. The following transactions occurred during the company’s first month. April 2 Mitchell invested $38,000 cash and computer equipment worth $18,600 in the company in exchange for its common stock. April 3 The company rented furnished office space by paying $2,200 cash for the first month’s (April) rent. April 4 The company purchased $2,200 of office supplies for cash. April 10 The company paid $1,800 cash for a 12-month insurance policy. Coverage begins on April 11. April 14 The company paid $1,540 cash for two weeks’ salaries earned by employees. April 24 The company collected $16,000 cash for commissions revenue. April 28 The company paid $1,540 cash for two weeks’ salaries earned by employees. April 29 The company paid $650 cash for minor repairs to computer equipment. April 30 The company paid $650 cash for this month’s telephone bill. April 30 The company paid $1,700 cash in dividends. Information for month-end adjustments follows: Prepaid insurance of $100 expired this month. At the end of the month, $650 of office supplies are still available. This month’s depreciation on computer equipment is $310. Employees earned $616 of unpaid and unrecorded salaries as of month-end. The company earned $1,850 of commissions revenue that is not yet recorded at month-end.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

GL0305 (Algo) - Based on Problem 3-5A LO P1, P3, P4, P5, P6

On April 1, Rick Mitchell created a new travel agency, Mitchell Travel. The following transactions occurred during the company’s first month.

April 2	Mitchell invested $38,000 cash and computer equipment worth $18,600 in the company in exchange for its common stock.
April 3	The company rented furnished office space by paying $2,200 cash for the first month’s (April) rent.
April 4	The company purchased $2,200 of office supplies for cash.
April 10	The company paid $1,800 cash for a 12-month insurance policy. Coverage begins on April 11.
April 14	The company paid $1,540 cash for two weeks’ salaries earned by employees.
April 24	The company collected $16,000 cash for commissions revenue.
April 28	The company paid $1,540 cash for two weeks’ salaries earned by employees.
April 29	The company paid $650 cash for minor repairs to computer equipment.
April 30	The company paid $650 cash for this month’s telephone bill.
April 30	The company paid $1,700 cash in dividends.

Information for month-end adjustments follows:

Prepaid insurance of $100 expired this month.
At the end of the month, $650 of office supplies are still available.
This month’s depreciation on computer equipment is $310.
Employees earned $616 of unpaid and unrecorded salaries as of month-end.
The company earned $1,850 of commissions revenue that is not yet recorded at month-end.