On March 1, 2015 you created a new travel agency, Jont Travel Agency. The follow
ID: 2484328 • Letter: O
Question
On March 1, 2015 you created a new travel agency, Jont Travel Agency. The following transactions occurred during the company’s first month.
March 1: You invested $20,000 cash and computer equipment worth $40,000 in the company.
March 2: The company rented furnished Office space by paying $1,700 cash for the first month’s (March) rent.
March 3: The company purchased $1,100 of Supplies for cash.
March 10: The company paid $3,600 cash for the premium on a 12-month insurance policy. Coverage begins on March 11.
March 14: The company paid $1,800 cash for two weeks, salaries earned by employees.
March 24: The company collected $7,900 cash on commissions from airlines on tickets obtained from customers.
March 28: The company paid $1,800 cash for two weeks’ salaries earned by employees.
March 29: The company paid $250. cash for minor repairs to the company’s computer.
March 30: The company paid $650. cash for this month’s telephone bill.
March 31: You withdrew $1,500 cash from the company for personal use.
The Company ‘s Chart of Accounts follows:
101 Cash 405 Commissions Earned
106 Accounts Receivable 612 Depreciation Expense – Equip.
124 Supplies 622 Salaries Expense
128 Prepaid Insurance 637 Insurance Expense
167 Computer Equipment 640 Rent & Maintenance Expense
168 Accumulated Depreciation 650 Office Supplies Expense
209 Salaries Payable 684 Repairs Expense
301 Your Name, Capital 688 Telephone Expense
302 Your Name, Withdrawals 700 Income Summary
Please complete the following tasks:
Task 1: Create a New Company file
Task 2: Prepare journal entries to record March transactions:
Task 3: Prepare Trial Balance at end of March:
Task 4: Use the following information to journalize the adjusting Entries:
(a) Two-thirds of one month’s insurance coverage has expired.
(b) At the end of the month, $700 of office supplies are still available.
(c) This month’s depreciation on the computer equipment is $600.
(d) Employees earned $320. of unpaid and unrecorded salaries as of month-end.
(e) The company earned $1,650 of commissions that are not yet billed at month-end (use the Accounts Receivable Account).
Task 5: Prepare the adjusting entries:
Task 6: Prepare the Adjusted Trial Balance at end of March.
Task 7: Prepare Income Statement (Profit & Loss) for March.
Task 8. Prepare the Owners’ Equity Statement for March.
Task 9: Prepare the Balance Sheet at end of March
Task 10: Prepare the closing entries for March.
Task 11. Prepare the Post Closing Trial Balance at end of March.
Task 12: Close the Accounting period for March.
----------------------------------------------- Prepare
l. Journal entries
ll. Trial Balance
III. Adjusting Entries
IV. Adjusting Trial Balance
V. Income Statement
VI. Owners’ Equity Statement
VII. Balance Sheet
VIII. Closing Entries.
IX. Post Closing Trial Balance.
Explanation / Answer
Date Accounts title Post Ref No Dr Cr 1-Mar Cash 101 20000 Jont Capital 301 20000 Computer equipment 167 40000 Jont Capital 301 40000 2-Mar Rent & maintenanceExpense 640 1700 cash 101 1700 3-Mar Supplies 124 1100 cash 101 1100 10-Mar Prepaid Insurance 128 3600 Cash 101 3600 14-Mar Salaries expenses 622 1800 Cash 101 1800 24-Mar Cash 101 7900 Commision earned 405 7900 28-Mar Salaries expenses 622 1800 Cash 101 1800 29-Mar Repair Expenses 684 250 Cash 101 250 30-Mar Telephone expenses 688 640 Cash 101 640 31-Mar Jont Withdrawls 302 1500 Cash 101 1500 Adjusting entry Insurance expense (3600/12*2/3) 637 200 Prepaid Insurance 128 200 Office supplies expenses 650 400 Supplies (1100-700) 124 400 Depreciation Expense – Equip 612 600 Accumulated depreciation 168 600 Salaries expenses 622 320 Salaries Payable 209 320 Accounts Receivable 106 1650 Commision earned 405 1650 Closing Entry Income summary 700 7710 Rent & maintenanceExpense 1700 Salaries expenses 3920 Repair Expenses 250 Insurance expense 200 Office supplies expenses 400 Depreciation Expense – Equip 600 Telephone expenses 640 Commision earned 405 9550 Income summary 700 9550 Income summary 700 1840 Jont Capital 301 1840 Unadjusted Trail balance Adjusting entries Adjusted Trial balance Particulars Post Ref Dr Cr Dr Cr Dr Cr Cash 101 15510 15510 Accounts Receivable 106 1650 1650 Supplies 124 1100 400 700 Prepaid Insurance 128 3600 200 3400 Computer equipment 167 40000 40000 Accumulated depreciation 168 600 600 Salaries Payable 209 320 320 Jont Capital 301 60000 60000 Jont Withdrawls 302 1500 1500 Commision earned 405 7900 1650 9550 Rent & maintenanceExpense 640 1700 1700 Salaries expenses 622 3600 320 3920 Repair Expenses 684 250 250 Insurance expense (3600/12*2/3) 637 200 200 Office supplies expenses 650 400 400 Depreciation Expense – Equip 612 600 600 Telephone expenses 688 640 640 Total 67900 67900 3170 3170 70470 70470 Income Statement Commision earned 9550 Less: expenses Rent & maintenanceExpense 1700 Salaries expenses 3920 Repair Expenses 250 Insurance expense 200 Office supplies expenses 400 Depreciation Expense – Equip 600 Telephone expenses 640 Total expenses 7710 Net Income 1840 Statement of Owners Equity Jont Capital 60000 Less:Jont Withdrawls -1500 Add: Net Income 1840 Ending balance 60340 Balance Sheet Assets Cash 15510 Accounts Receivable 1650 Supplies 700 Prepaid Insurance 3400 Computer equipment 40000 Accumulated depreciation 600 39400 Total assets 60660 Liabilities Salaries Payable 209 320 Owner Equity 301 60340 Total Liabilities and Owner Equity 60660 Closing Trial balance Particulars Post Ref Dr Cr Cash 101 15510 Accounts Receivable 106 1650 Supplies 124 700 Prepaid Insurance 128 3400 Computer equipment 167 40000 Accumulated depreciation 168 600 Salaries Payable 209 320 Jont Capital 301 60000 Jont Withdrawls 302 1500 Income summary 1840 Total 62760 62760
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