On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The

Question

On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.

On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 1 Nozomi invested $44,000 cash and computer equipment worth $35,000 in the company in exchange for common stock 2 The company rented furnished office space by paying $2,700 cash for the first month's (April) rent 3 The company purchased $1,700 of office supplies for cash. 10 The company paid $2,900 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,200 cash for two weeks salaries earned by employees. 24 The company collected $16,500 cash on commissions from airlines on tickets obtained for customers 28 The company paid $1,200 cash for two weeks' salaries earned by employees 29 The company paid $350 cash for minor repairs to the company's computer. 30 The company paid $850 cash for this month's telephone bil1. 30 The company paid $2,400 cash in dividends The company's chart of accounts follows 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation-Computer Equip. 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Earned 612 Depreciation Expense Computer Equip. 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary

Explanation / Answer

5a. income statement

commission earned 18050

less: expenses

salaries 2820

rent 2700

telephone 850

dep. exp- computer 400

office supplies expense 1000

repair 350

insurance expense 161    8281

Net income $9769

b.    retained earnings ,april 1,2017 = 0

add: net income =   9769

less: dividend = (2400)

    retained earnings ,april 30 ,2017 = 7369

.

d

Date Accounts Dr Cr 30 April Commission earned 18050 To income summary 18050 30 April income summary 8281 To Salaries expense 2820 To Rent 2700 To Telephone 850 Depreciation exp - Computer 400 office supplies expense 1000 repair 350 Insurance expense 161 30 April Income summary   9769 To Retained earnings   9769 30 April Retained earnings 2400 To Dividend 2400

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