| April | | 1 | | Nozomi invested$37,000 cash and computer equipment worth $25,000 in the company inexchange for common stock. |
| | 2 | | The company rentedfurnished office space by paying $2,000 cash for the first month’s(April) rent. |
| | 3 | | The companypurchased $1,300 of office supplies for cash. |
| | 10 | | The company paid$2,500 cash for the premium on a 12-month insurance policy.Coverage begins on April 11. |
| | 14 | | The company paid$1,800 cash for two weeks' salaries earned by employees. |
| | 24 | | The companycollected $13,500 cash for commissions earned. |
| | 28 | | The company paid$1,800 cash for two weeks' salaries earned by employees. |
| | 29 | | The company paid$450 cash for minor repairs to the company's computer. |
| | 30 | | The company paid$1,450 cash for this month's telephone bill. |
| | 30 | | The company paid$1,700 cash in dividends. |
The company's chart of accounts follows:
|
| 101 | Cash | 405 | Commissions Earned |
| 106 | AccountsReceivable | 612 | DepreciationExpense—Computer Equip. |
| 124 | OfficeSupplies | 622 | SalariesExpense |
| 128 | PrepaidInsurance | 637 | InsuranceExpense |
| 167 | ComputerEquipment | 640 | RentExpense |
| 168 | AccumulatedDepreciation—Computer Equip. | 650 | Office SuppliesExpense |
| 209 | SalariesPayable | 684 | RepairsExpense |
| 307 | CommonStock | 688 | TelephoneExpense |
| 318 | RetainedEarnings | 901 | IncomeSummary |
| 319 | Dividends | | |
|
Use the following information:
- Prepaid insurance of $139 has expired this month.
- At the end of the month, $600 of office supplies are stillavailable.
- This month’s depreciation on the computer equipment is$500.
- Employees earned $320 of unpaid and unrecorded salaries as ofmonth-end.
- The company earned $2,200 of commissions that are not yetbilled at month-end.
Required:
1. & 2. Prepare journalentries to record the transactions for April and post them to theledger accounts in Requirement 6b. The company records prepaid andunearned 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 monthand prepare the adjusted trial balance.
5a. Prepare the income statement for the month ofApril 30.
5b. Prepare the statement of retained earnings forthe month of April 30.
5c. Prepare the balance sheet at April 30.
6a. Prepare journal entries to close the temporaryaccounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.
