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 April 1 Nozomi invested $45,000 cash and computer equipment worth $30,000 in the company 2 The company rented furnished office space by paying $2,400 cash for the first month's (April) rent. 3 The company purchased $1,600 of office supplies for cash. 10 The company paid $2,800 cash for the premium on a 12-month insurance policy. Coverage begins on April 11 14 The company paid $1,500 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 $1,500 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 $1,200 cash for this month's telephone bil1 30 Nozomi withdrew $1,700 cash from the company for personal use 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 Pavable 301 J. Nozomi, Capital 302 J. Nozomi, Withdrawals 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 Use the following information: a. Two-thirds (or $156) of one month's insurance coverage has expired b. At the end of the month, $400 of office supplies are still available c. This month's depreciation on the computer equipment is $600 d. Employees earned $340 of unpaid and unrecorded salaries as of month-end e. The company earned $1,550 of commissions that are not yet billed at month-end

Explanation / Answer

Closing entries 1 Commission earned 19050              Income summary 19050 2 Income summary 9296 Depreciation expense computer equipment 600 Salaries expense 3340 Insurance expense 156 rent expense 2400 Office suplies expense 1200 Repair expense 400 Telephone expense 1200 3 Income summary 9754 J. Nozomi capital 9754 4 J. Nozomi capital 1700 J. Nozomi Drawings 1700

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