Problem 4-1A Applying the accounting cycle LO C1, C2, P2, P3 On April 1, 2017, J
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Problem 4-1A Applying the accounting cycle LO C1, C2, P2, P3
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 $128) of one month’s insurance coverage has expired.
At the end of the month, $800 of office supplies are still available.
This month’s depreciation on the computer equipment is $600.
Employees earned $480 of unpaid and unrecorded salaries as of month-end.
The company earned $1,700 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.
(EXAMPLES OF HOW QUESTIONS ARE SUPOSSED TO BE ANSWERED)
April 1 Nozomi invested $46,000 cash and computer equipment worth $20,000 in the company. 2 The company rented furnished office space by paying $2,300 cash for the first month’s (April) rent. 3 The company purchased $1,900 of office supplies for cash. 10 The company paid $2,300 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,100 cash for two weeks' salaries earned by employees. 24 The company collected $8,500 cash on commissions from airlines on tickets obtained for customers. 28 The company paid $1,100 cash for two weeks' salaries earned by employees. 29 The company paid $500 cash for minor repairs to the company's computer. 30 The company paid $1,000 cash for this month's telephone bill. 30 Nozomi withdrew $1,900 cash from the company for personal use. 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation-Computer Equip. 209 Salaries Payable 301 J. No zom, Capital 302 J. Nozomi, WithdrawalsS 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 SummaryExplanation / Answer
ADVENTURE TRAVEL Date General Journal Chart no. Debit $ Credit $ 2017 1-Apr Cash 101 46000 Computer equipment 167 20000 J.Nozomi, Capital 301 66000 2-Apr Rent expense 640 2300 Cash 101 2300 3-Apr Office supplies 124 1900 Cash 101 1900 10-Apr Insurance expense 637 2300 Cash 101 2300 14-Apr Salaries expense 622 1100 Cash 101 1100 24-Apr Cash 101 8500 Commissions earned 405 8500 28-Apr Salaries expense 622 1100 Cash 101 1100 29-Apr Repairs expense 684 500 Cash 101 500 30-Apr Telephone expense 688 1000 Cash 101 1000 30-Apr J.Nozomi, Withdrawals 302 1900 Cash 101 1900 86600 86600 UNADJUSTED TRIAL BALANCE FTME April, 2017 Account Titles Debit $ Credit $ Cash 42400 Computer equipment 20000 J.Nozomi, Capital 66000 J.Nozomi, Withdrawals 1900 Rent expense 2300 Office supplies 1900 Insurance expense 2300 Salaries expense 2200 Commissions earned 8500 Repairs expense 500 Telephone expense 1000 74500 74500
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