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Problem 4-1A Applying the accounting cycle LO C1, C2, P2, P3 1.66 points 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 $33,000 cash and computer equipment worth $40,000 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 $1,200 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 company collected $10,500 cash on commissions from airlines on tickets obtained for customers. 28 The company paid $1,800 cash for two weeks' salaries earned by employees. 29 The company paid $250 cash for minor repairs to the company's computer. 30 The company paid $1,400 cash for this month's telephone bill. 30 Nozomi withdrew $2,400 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 Payable 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 $139) of one month's insurance coverage has expired. b. At the end of the month, $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $300. d. Employees earned $530 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,950 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. Req 1 and 2 Req3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Reg 5C Req 6A Req 6B GL Req 7 Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b. T company records prepaid and unearned items in balance sheet accounts. No General Journal Credit Date April 01 Cash Computer equipment J. Nozomi, Capital Debit 33,000 40,000 73,000 April 02 2,400 Rent expense Cash 2,400 April 03 1,200 Office supplies Cash 1,200 April 10 2,500 Prepaid insurance Cash 2,500 April 14 1,800 Salaries expense Cash 1,800 April 24 10,500 Cash Commissions earned 10,500 April 28 1,800 Salaries expense Cash 1,800 April 29 Repairs expense Cash 250 April 30 1,400 Telephone expense Cash 1,400 10 April 30 2,400 J. Nozomi, Withdrawals Cash 2,400 Req 1 and 2 Req 3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Req 5C Using account balances from Requirement 6b, prepare an unadjusted trial balance as Credit Debit 29,750 1,200 2,500 40,000 ADVENTURE TRAVEL Unadjusted Trial Balance April 30, 2017 Account Title 101: Cash $ 106: Accounts receivable 124: Office supplies 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 301: J. Nozomi, Capital 302: J. Nozomi, Withdrawals 405: Commissions earned 612: Depreciation expense-Computer equipment 622: Salaries expense 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total 73,000 2,400 10,500 3,600 2,400 250 1,400 83,500 $ 83,500 Req 1 and 2 Req3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Req 5C Req 6A Req 6B GL Req7 Journalize the adjusting entries for the month, and then post to the ledger on Req 6B tab, using April 30 Adj. as the No Transaction General Journal Credit Debit 139 a. Insurance expense Prepaid insurance 139 600 Office supplies expense Office supplies 600 300 Depreciation expense-Computer equip. Accumulated depreciation-Computer equip. oooooooooo 300 530 Salaries expense Salaries payable 530 Accounts receivable Commissions earned 1,9500 1,950 1,950 Req 1 and 2 Req3 Req 4 Adj Reg 4 Adj Entries Trial Bal Req 5A Req 5B Req 5C Using adjusted account balances from Requirement 6b, prepare an adjusted trial b intermediate calculations.) Debit Credit 1,950 600 X 139X ADVENTURE TRAVEL Adjusted Trial Balance April 30, 2017 Account Title 101: Cash 106. Accounts receivable 124: Office supplies 128: Prepaid insurance 167: Computer equipment 168: Accumulated depreciation-Computer equipment 209: Salaries payable 301: J. Nozomi, Capital 302: J. Nozomi, Withdrawals 405: Commissions earned 612: Depreciation expense-Computer equipment 622: Salaries expense 637: Insurance expense 640: Rent expense 650: Office supplies expense 684: Repairs expense 688: Telephone expense Total 300 530 1,950 X 300 530 X 139 600 $ 3,519 $ 3,519 Reg 1 and 2 Reg 3 Req 4 Adj Reg 4 Adj Entries Trial Bal Req 5A Reg 5B Prepare the income statement for the month of April 30, 2017. $ 10,500 X ADVENTURE TRAVEL Income Statement For Month Ended April 30, 2017 Revenues: Commissions earned Expenses: Rent expense 2,400 Salaries expense 4,130 Repairs expense 250 Telephone expense 1,400 Insurance expense 139 Office supplies expense 600 Depreciation expense-Computer equip. 300 0000000 Total expenses Net income 9.219 1.281 0 Req 1 and 2 Req3 Req 4 Adj Reg 4 Adj Entries Trial Bal Req 5A Req 5B Prepare the statement of owner's equity for the month of April 30, 2017. 0 ADVENTURE TRAVEL Statement of Owner's Equity For Month Ended April 30, 2017 J. Nozomi, Capital, April 1, 2017 Add: Net income $ 1,281 % Add: Owner investments 73.000 Less: Withdrawals J.Nozomi, Capital, April 30, 2017 74,281 (2,400) 71,881 Req 1 and 2 Req 3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Req 5C Prepare the balance sheet at April 30, 2017. ADVENTURE TRAVEL Balance Sheet April 30, 2017 Assets $ Cash Accounts receivable Prepaid insurance Office supplies 29,750 1,950 139 X 600 O Total assets $ 32,439 Liabilities Salaries payable 530 v Equity J. Nozomi, Capital Total liabilities and equity 71,881 X 72,411 $ Req 1 and 2 Req3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Reg 5C Reg 6A Req 6B GL Req 7 Prepare journal entries to close the temporary accounts and then post to Req 6B General Ledger, using April 30 Close as the date. No General Journal Credit Date April 30 Debit 12,450 Commissions earned Income summary 12,450 April 30 7,419 X Income summary Rent expense Salaries expense Repairs expense Telephone expense Insurance expense Office supplies expense Depreciation expense-Computer equip. 2,400 2,330 250 1,400 139 600 300 April 30 1,287 X Income summary J. Nozomi, Capital 1.287 X 4 April 30 2,400 J. Nozomi, Capital J. Nozomi, Withdrawals 2,400 Req 1 and 2 Reg 3 Req 4 Adj Reg 4 Adj Entries Trial Bal Req 5A Req 5B Reg 5C Req 6A Req 6B GL Req 7 Post the journal entries to the ledger. General Ledger accounts Date Cash Debit 33,000 Credit Accounts Receivable Debit Credit 1,950 Date April 30 Adi. Balance 33,000 1,950 2,400 1,200 2,500 1,800 April 1 April 2 April 3 April 10 April 14 April 24 April 28 April 29 April 30 April 30 WD 10,500 30,600 29,400 26,900 25,100 35,600 33,800 33,550 32,150 29,750 v 1,800 250 1,400 2,400 Date April 3 April 30 Adj. Office Supplies Debit Credit 1,200 600 Balance 1,200 600 Date April 10 April 30 Prepaid Insurance Debit Credit 2,500 139 Balance 2,500 2,361 Adj. Date April 1 Computer Equipment Debit Credit 40,000 Balance 40,000 Accumulated Depreciation-Computer equipment Date Debit Credit Balance April 30 300 300 Adi Date April 30 Adj. Salaries Payable Debit Credit 530 Balance 530 Date April 1 J. Nozomi, Capital Debit Credit 73,000 Balance 73,000 Date April 30 J. Nozomi, Withdrawals Debit Credit 2,400 Balance 2,400 Date April 24 April 30 Commissions earned Debit Credit 10,500 1,950 Balance 10.500 12,450 Adj. Depreciation Expense-Computer Equipment Date Debit Credit Balance April 30 300 300 Date April 14 April 30 Salaries Expense Debit Credit 1,800 530 1,800 Balance 1,800 Adj Adi. 2,330 4,130 April 28 Req 1 and 2 Reg 3 Req 4 Adj Req 4 Adj Entries Trial Bal Req 5A Req 5B Reg 5C Req 6A Req 6B GL Req 7 Prepare a post-closing trial balance. Credit ADVENTURE TRAVEL Post-Closing Trial Balance April 30, 2017 Account Title Salaries expense Rent expense Repairs expense Telephone expense Depreciation expense- Computer equipment Office supplies expense Insurance expense Commissions earned Totals $ * Debit 4.130 2,400 250 X 1,400 X 300 X 600 139 X 12,450 X 21,669 $ 0