Required: 1. & 2. Prepare journal entries to record the transactions for April a
ID: 2334161 • Letter: R
Question
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 and post the adjusting entries for the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of April 30, 2017.
5b. Prepare the statement of retained earnings for the month of April 30, 2017.
5c. Prepare the balance sheet at April 30, 2017.
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.
On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
The company's chart of accounts follows:
Use the following information:
Two-thirds (or $139) of one month’s insurance coverage has expired.
At the end of the month, $400 of office supplies are still available.
This month’s depreciation on the computer equipment is $400.
Employees earned $560 of unpaid and unrecorded salaries as of month-end.
The company earned $1,800 of commissions that are not yet billed at month-end.
April 1 Nozomi invested $45,000 cash and computer equipment worth $25,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $1,900 cash for the first month’s (April) rent. 3 The company purchased $1,600 of office supplies for cash. 10 The company paid $2,500 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $800 cash for two weeks' salaries earned by employees. 24 The company collected $17,500 cash on commissions from airlines on tickets obtained for customers. 28 The company paid $800 cash for two weeks' salaries earned by employees. 29 The company paid $450 cash for minor repairs to the company's computer. 30 The company paid $1,500 cash for this month's telephone bill. 30 The company paid $2,500 cash in dividends.Explanation / Answer
Answer 1 & 4 & 6. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Apr Cash 45,000 Computer 25,000 Common Stock 70,000 2-Apr Rent Expenses 1,900 Cash 1,900 3-Apr Office Suplies 1,600 Cash 1,600 10-Apr Prepaid Insurance 2,500 Cash 2,500 14-Apr Salaries Expenses 800 Cash 800 24-Apr Cash 17,500 Commission Earned 17,500 28-Apr Salaries Expenses 800 Cash 800 29-Apr Repairs Expenses 450 Cash 450 30-Apr Telephone Expenses 1,500 Cash 1,500 30-Apr Dividends 2,500 Cash 2,500 Adjusting Entry a. Insurance Expenses 139 Prepaid Insurance 139 b. Office Supplies Expenses 1,200 Office Supplies 1,200 c. Depreciation Expenses 400 Accumulated Dep. - Computer 400 d. Salaries Expenses 560 Salary Payable 560 e. Accounts Receivable 1,800 Commission Earned 1,800 Closing Journal Entries a. Income Summary Dr. 7,749 To Dep. Expenses - Computer 400 To Salaries Expenses 2,160 To Insurance Expense 139 To Rent Expense 1,900 To Office Supplies Expense 1,200 To Repairs Expense 450 To Telephone Expense 1,500 b. Commision Earned Dr. 19,300 To Income Summary 19,300 c. Income Summary Dr. 11,551 To Retained Earnings 11,551 d. Retained Earnings Dr. 2,000 To Dividends 2,000 Answer 2. Cash Accounts Receivable Office Supplies 1-Apr 45,000 1,900 2-Apr e. 1,800 3-Apr 1,600 1,200 b. 24-Apr 17,500 1,600 3-Apr 2,500 10-Apr 800 14-Apr 800 28-Apr 450 29-Apr 1,500 30-Apr 2,500 30-Apr End. Bal 50,450 End. Bal 1,800 End. Bal 400 Prepaid Insurance Computer Accumulated Dep - Computer 10-Apr 2,500 139 a. 1-Apr 25,000 400 c. End. Bal 2,361 End. Bal 25,000 End. Bal 400 Salaries Payable Common Stock Dividends 560 d. 70,000 1-Apr 30-Apr 2,500 End. Bal 560 End. Bal 70,000 End. Bal 2,500 Commision Earned Dep. Expenses - Computer Salaries Expenses 17,500 24-Apr c. 400 14-Apr 800 1,800 e. 28-Apr 800 d. 560 End. Bal 19,300 End. Bal 400 End. Bal 2,160 Insurance Expense Rent Expense Office Supplies Expense a. 139 2-Apr 1,900 b. 1,200 End. Bal 139 End. Bal 1,900 End. Bal 1,200 Repairs Expense Telephone Expense 29-Apr 450 30-Apr 1,500 End. Bal 450 End. Bal 1,500 Answer 3. Unadjusted Trial Balance April 30, 2017 Particulars Dr. Amt. Cr. Amt. Cash 50,450.00 Accounts Receivable - Office Supplies 1,600.00 Prepaid Insurance 2,500.00 Computer 25,000.00 Accumulated Dep - Computer - Salaries Payable - Common Stock 70,000.00 Dividends 2,500.00 Commision Earned 17,500.00 Dep. Expenses - Computer - Salaries Expenses 1,600.00 Insurance Expense - Rent Expense 1,900.00 Office Supplies Expense - Repairs Expense 450.00 Telephone Expense 1,500.00 Total 87,500.00 87,500.00 - Answer 4. Adjusted Trial Balance April 30, 2017 Particulars Dr. Amt. Cr. Amt. Cash 50,450.00 Accounts Receivable 1,800.00 Office Supplies 400.00 Prepaid Insurance 2,361.00 Computer 25,000.00 Accumulated Dep - Computer 400.00 Salaries Payable 560.00 Common Stock 70,000.00 Dividends 2,500.00 Commision Earned 19,300.00 Dep. Expenses - Computer 400.00 Salaries Expenses 2,160.00 Insurance Expense 139.00 Rent Expense 1,900.00 Office Supplies Expense 1,200.00 Repairs Expense 450.00 Telephone Expense 1,500.00 Total 90,260.00 90,260.00 - Answer 5. Income Statement For The Month Ended April 30, 2017 Revenue Commision Earned 19,300.00 Operating Expenses Selling & Admn. Expenes Dep. Expenses - Computer 400.00 Salaries Expenses 2,160.00 Insurance Expense 139.00 Rent Expense 1,900.00 Office Supplies Expense 1,200.00 Repairs Expense 450.00 Telephone Expense 1,500.00 7,749.00 Net Operating Income 11,551.00 Retained Earning Statement As on April 30, 2017 Beginning Balance - Net Operating Income 11,551.00 Sub-total 11,551.00 Less: Dividends 2,500.00 Ending Balance 9,051.00 Answer e. Balance Sheet As on April 30, 2017 Assets Current Assets Cash 50,450.00 Accounts Receivable 1,800.00 Office Supplies 400.00 Prepaid Insurance 2,361.00 55,011.00 Property, Plant & Equipment Computer 25,000.00 Accumulated Depreciation (400.00) 24,600.00 Total Assets 79,611.00 Liabilities & Stockholders' Equity Liabilities Current Liabilities Salaries Payable - 560.00 Long Term Liabilities - Total Liabilities 560.00 Stockholders' Equity Common Stock 70,000.00 Retained Earnings 9,051.00 Total Stockholders' Equity 79,051.00 Total Laibilities & Stockholders' Equity 79,611.00 Answer 7. Post Closing Trial Balance April 30, 2017 Particulars Dr. Amt. Cr. Amt. Cash 50,450.00 Accounts Receivable 1,800.00 Office Supplies 400.00 Prepaid Insurance 2,361.00 Computer 25,000.00 Accumulated Depreciation 400.00 Salaries Payable 560.00 Common Stock 70,000.00 Retained Earnings 9,051.00 Total 80,011.00 80,011.00
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