Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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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 $34,000 cash and computer equipment worth $30,000 in the company in exchange for common stock. |
|---|---|
| April 2 | The company rented furnished office space by paying $2,300 cash for the first month’s (April) rent. |
| April 3 | The company purchased $1,300 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 $1,800 cash for two weeks' salaries earned by employees. |
| April 24 | The company collected $17,500 cash for commissions revenue. |
| April 28 | The company paid $1,800 cash for two weeks' salaries earned by employees. |
| April 29 | The company paid $500 cash for minor repairs to the company's computer. |
| April 30 | The company paid $1,300 cash for this month's telephone bill. |
| April 30 | The company paid $1,700 cash in dividends. |
The company's chart of accounts follows:
| 101 | Cash | 405 | Commissions Revenue |
| 106 | 612 | Depreciation Expense—Computer Equipment | |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | 650 | Office Supplies Expense | |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 307 | Common Stock | 688 | Telephone Expense |
| 318 | 901 | Income Summary | |
| 319 | Dividends |
Use the following information:
- Prepaid insurance of $133 has expired this month.
- At the end of the month, $600 of office supplies are still available.
- This month’s depreciation on the computer equipment is $400.
- Employees earned $580 of unpaid and unrecorded salaries as of month-end.
- The company earned $2,000 of commissions that are not yet billed at month-end.
Required:
1. & 2. Prepare
3. Using account balances from Requirement 6b, prepare an unadjusted
4. Journalize the
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.
7. Prepare a post-closing trial balance.
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