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.

The company's chart of accounts follows:

Use the following information:

Two-thirds (or $133) of one month’s insurance coverage has expired.

At the end of the month, $600 of office supplies are still available.

This month’s depreciation on the computer equipment is $500.

Employees earned $320 of unpaid and unrecorded salaries as of month-end.

The company earned $2,200 of commissions that are not yet billed at month-end.

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 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 owner's equity 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.

April 1 Nozomi invested $31,000 cash and computer equipment worth $30,000 in the company. 2 The company rented furnished office space by paying $1,900 cash for the first month’s (April) rent. 3 The company purchased $1,400 of office supplies for cash. 10 The company paid $2,400 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,400 cash for two weeks' salaries earned by employees. 24 The company collected $23,000 cash on commissions from airlines on tickets obtained for customers. 28 The company paid $1,400 cash for two weeks' salaries earned by employees. 29 The company paid $400 cash for minor repairs to the company's computer. 30 The company paid $1,350 cash for this month's telephone bill. 30 Nozomi withdrew $2,100 cash from the company for personal use.

Explanation / Answer

1 & 2) Adventure Travel

Journal Entries (Amounts in $)

Posting of the Above Journal Entries Amounts in $)

Cash

Computer Equipment

J. Nozomi, Capital

   J. Nozomi, Drawings

  Rent Expense

Office Supplies

Prepaid Insurance

Salaries Expense

  Commissions Earned

Repairs Expense

Telephone Expense

3) Unadjusted Trial Balance as on April 30 (Amt in $)

4) Adjusting Journal Entries (Amounts in $)

Adjusted Trial Balance (Amounts in $)

Date Account Titles and Explanations Debit Credit April 1 Cash 31,000 Computer Equipment 30,000 J. Nozomi, Capital 61,000 April 2 Rent Expense 1,900 Cash 1,900 April 3 Office Supplies 1,400 Cash 1,400 April 10 Prepaid Insurance 2,400 Cash 2,400 April 14 Salaries Expense 1,400 Cash 1,400 April 24 Cash 23,000 Commissions Earned 23,000 April 28 Salaries Expense 1,400 Cash 1,400 April 29 Repairs Expense 400 Cash 400 April 30 Telephone Expense 1,350 Cash 1,350 April 30 J. Nozomi, Withdrawals 2,100 Cash 2,100

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