April 1, 2013, Jiro Nozomicreated a new travel agency, Adventure Travel. The followingtransactions occurred during the companyâs first month.
April 1 Nozomi invested $37,000 cash andcomputer equipment worth $27,000 in the company in exchange forcommon stock. 2 The company rented furnished officespace by paying $2,500 cash for the first monthâs (April)rent. 3 The company purchased $1,700 ofoffice supplies for cash. 10 The company paid $2,250 cash for the premium on a 12-monthinsurance policy. Coverage begins on April 11.
14 The company paid $2,300 cash fortwo weeksâ salaries earned by employees. 24 The company collected $11,500 cash on commissions from airlineson tickets obtained for customers.
28 The company paid $2,300 cash fortwo weeksâ salaries earned by employees. 29 The company paid $500 cash forminor repairs to the companyâs computer. 30 The company paid $800 cash for thismonthâs telephone bill. 30 The company paid $2,200 cash fordividends.
The companyâs chart of accountsfollows:
101 Cash 405 Commissions Earned 106 Accounts Receivable 612 Depreciation ExpenseâComputerEquip. 124 Office Supplies 622 Salaries Expense 128 Prepaid Insurance 637 Insurance Expense 167 Computer Equipment 640 Rent Expense 168 AccumulatedDepreciationâComputer Equip. 650 Office Supplies Expense 209 Salaries Payable 684 Repairs Expense 307 Common Stock 688 Telephone Expense 318 Retained Earnings 901 Income Summary 319 Dividends
Use the followinginformation:
a. Two-thirds (or $125) of onemonthâs insurance coverage has expired. b. At the end of the month, $950 ofoffice supplies are still available. c. This monthâs depreciation on thecomputer equipment is $850. d. Employees earned $490 of unpaidand unrecorded salaries as of month-end. e. The company earned $2,450 of commissions that are not yetbilled at month-end.
1. Prepare the income statement for the month of April 30,2013.
2.Prepare the statement of retained earnings for the month ofApril 30, 2013.
3. Prepare the balance sheet at April 30, 2013.
4. Prepare journal entries to close the temporary accounts andthen post to section 6.2
5. Post the journal entries to the ledger.
6. Prepare a post-closing trial balance. (Please prepareyour trial balance in chart of accounts order given in thequestion.)
| April 1, 2013, Jiro Nozomicreated a new travel agency, Adventure Travel. The followingtransactions occurred during the companyâs first month. |
| April | 1 | Nozomi invested $37,000 cash andcomputer equipment worth $27,000 in the company in exchange forcommon stock. | |
| 2 | The company rented furnished officespace by paying $2,500 cash for the first monthâs (April)rent. | ||
| 3 | The company purchased $1,700 ofoffice supplies for cash. | ||
| 10 | The company paid $2,250 cash for the premium on a 12-monthinsurance policy. Coverage begins on April 11. | ||
| 14 | The company paid $2,300 cash fortwo weeksâ salaries earned by employees. | ||
| 24 | The company collected $11,500 cash on commissions from airlineson tickets obtained for customers. | ||
| 28 | The company paid $2,300 cash fortwo weeksâ salaries earned by employees. | ||
| 29 | The company paid $500 cash forminor repairs to the companyâs computer. | ||
| 30 | The company paid $800 cash for thismonthâs telephone bill. | ||
| 30 | The company paid $2,200 cash fordividends. |
| The companyâs chart of accountsfollows: |
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation ExpenseâComputerEquip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | AccumulatedDepreciationâComputer Equip. | 650 | Office Supplies Expense |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 307 | Common Stock | 688 | Telephone Expense |
| 318 | Retained Earnings | 901 | Income Summary |
| 319 | Dividends | ||
| Use the followinginformation: |
| a. | Two-thirds (or $125) of onemonthâs insurance coverage has expired. | ||||||||
| b. | At the end of the month, $950 ofoffice supplies are still available. | ||||||||
| c. | This monthâs depreciation on thecomputer equipment is $850. | ||||||||
| d. | Employees earned $490 of unpaidand unrecorded salaries as of month-end. | ||||||||
| e. The company earned $2,450 of commissions that are not yetbilled at month-end.
|
Related questions
| April 1, 2013, Jiro Nozomicreated a new travel agency, Adventure Travel. The followingtransactions occurred during the companyâs first month. |
| April | 1 | Nozomi invested $37,000 cash andcomputer equipment worth $27,000 in the company in exchange forcommon stock. | |
| 2 | The company rented furnished officespace by paying $2,500 cash for the first monthâs (April)rent. | ||
| 3 | The company purchased $1,700 ofoffice supplies for cash. | ||
| 10 | The company paid $2,250 cash for the premium on a 12-monthinsurance policy. Coverage begins on April 11. | ||
| 14 | The company paid $2,300 cash fortwo weeksâ salaries earned by employees. | ||
| 24 | The company collected $11,500 cash on commissions from airlineson tickets obtained for customers. | ||
| 28 | The company paid $2,300 cash fortwo weeksâ salaries earned by employees. | ||
| 29 | The company paid $500 cash forminor repairs to the companyâs computer. | ||
| 30 | The company paid $800 cash for thismonthâs telephone bill. | ||
| 30 | The company paid $2,200 cash fordividends. |
| The companyâs chart of accountsfollows: |
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation ExpenseâComputerEquip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | AccumulatedDepreciationâComputer Equip. | 650 | Office Supplies Expense |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 307 | Common Stock | 688 | Telephone Expense |
| 318 | Retained Earnings | 901 | Income Summary |
| 319 | Dividends | ||
| Use the followinginformation: |
| a. | Two-thirds (or $125) of onemonthâs insurance coverage has expired. |
| b. | At the end of the month, $950 ofoffice supplies are still available. |
| c. | This monthâs depreciation on thecomputer equipment is $850. |
| d. | Employees earned $490 of unpaidand unrecorded salaries as of month-end. |
| e. | The company earned $2,450 ofcommissions that are not yet billed at month-end. |
1. Prepare journal entries to close the temporary accounts andthen post to section 6.2.
2. Post the journal entries to the ledger.
Assignment Details
Final Project Overview
Throughout this course, you have learned various components ofaccounting. These components work hand-in-hand to create theaccounting cycle â the process of recording, summarizing andreporting transactions. The final project will provide you theopportunity to apply the skills covered in this course through thecompletion of the accounting cycle. In addition, you will be ableto demonstrate your understanding through analysis of the completedinformation. This project will be completed in two parts in Units 3and 5.
Final Project Data
On December 1, 2015 John Trap created a new travel agency, TrapAdventures, Inc. providing exclusive adventure trips. The followingtransactions occurred during December 2015.
(NOTE: There are no beginning balances â this is a newcompany.)
Dec 1 | John Trap invested $60,000 cash in the company for commonstock. |
2 | Purchase office equipment for $17,500 cash. |
2 | The company rented furnished office space by paying $18,000 cashfor the first six months (December 2015 - May 2016) rent. |
3 | The company purchased $1,500 of office supplies on account. |
10 | The company paid $3,600 cash for the premium on a 12-monthinsurance policy. |
14 | The company paid $10,750 cash for two weeks' salaries earned byemployees. |
24 | The company collected $54,000 cash on commissions from airlineson tickets obtained for customers. |
28 | The company paid $12,125 cash for two weeks' salaries earned byemployees. |
29 | The company paid $350 cash for minor repairs to the company'scomputer. |
30 | The company paid $450 cash for this month's telephone bill. |
30 | Dividends of $3,000 cash were paid. |
Adjustment Data:
One month's insurance coverage has expired.
The company occupied the office space for the month ofDecember.
At the end of the month, $600 of office supplies are stillavailable.
This month's depreciation on the computer equipment is $325.
Employees earned $525 of unpaid and unrecorded salaries as ofmonth-end.
Final Project Requirements
Using the spreadsheet found here and information above, completethe following:
Journal entries to record the transactions that occurred duringthe month of December.
Prepare an unadjusted trial balance.
