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 $32,000 cash and computer equipment worth $30,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $2,800 cash for the first month's (April) rent. 3 The company purchased $1,300 of office supplies for cash. 10 The company paid $2,800 cash for the premiun 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 $22,000 cash on connissions 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 $300 cash for minor repairs to the company's computer 30 The company paid $1,300 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 106 Recounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation Computer Equip. 209 Salaries Payable 307 Connon Stock 318 Retained Earnings 319 Dividenda 405 Comissions Barned 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 Incone 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, $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $400. d. Employees earned $320 of unpaid and unrecorded salaries as of month-end. e. The company earned $1,600 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 65. The company records prepaid and unearned items in balance sheet accounts.

Answer 1

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Nozomi	Answer -1 Journal Entries
Date	Account	Debit	Credit
April 1st	Cash	32,000.00
	Computer Equipment	30,000.00
	J. Nozomi, Capital		62,000.00
	(being share capital raised by providing cash and Equipment)
April 2nd	Rent Expense	2,800.00
	Cash		2,800.00
	(being rent paid for the month)
April 3rd	Office Supplies	1,300.00
	Cash		1,300.00
	(being office supplies purchased)
April 10th	Prepaid Insurance	2,800.00
	Cash		2,800.00
	(being insurance expense paid for the year)
April 14th	Salaries Expense	1,500.00
	Cash		1,500.00
	(being salaries paid for two weeks.)
April 24th	Cash	22,000.00
	Commission Earned		22,000.00
	(being commission income earned)
April 28th	Salaries Expense	1,500.00
	Cash		1,500.00
	(being salaries paid for two weeks.)
April 29th	Repairs Expense	300.00
	Cash		300.00
	(being repairs paid in cash.)
April 30th	Telephone Expense	1,300.00
	Cash		1,300.00
	(being Telephone Bill paid in cash.)
April 30th	Dividends	1,700.00
	Cash		1,700.00
	(being cash withdrawn for personal use.)
	Answer 3- Unadjusted Trial Balance	Debit	Credit
	Cash	40,800.00
	Accounts Receivable	-
	Office Supplies	1,300.00
	Prepaid Insurance	2,800.00
	Computer Equipment	30,000.00
	Accumulated Depreciation—Computer Equip.		-
	Salaries Payable		-
	J. Nozomi, Capital		62,000.00
	Dividends	1,700.00
	Commission Earned		22,000.00
	Depreciation Expense—Computer Equip.	-
	Salaries Expense	3,000.00
	Insurance Expense	-
	Rent Expense	2,800.00
	Office Supplies Expense	-
	Repairs Expense	300.00
	Telephone Expense	1,300.00
	Total	84,000.00	84,000.00

F Н. J G Answer 2 and 6 b- Ledger Cash Debit 32,000.00 Date April 1st April 2nd April 3rd April 10th April 14th April 24th April 28th April 29th April 30th April 30th Account 1. Nozomi, Capital Rent Expense Office Supplies Prepaid Insurance Salaries Expense Commission Earned Salaries Expense Repairs Expense Telephone Expense Dividends Credit Balance 32,000.00 2,800.00 29,200.00 1,300.00 27,900.00 2,800.00 25,100.00 1,500.00 23,600.00 45,600.00 1,500.00 44,100.00 300.00 43,800.00 1,300.00 42,500.00 1,700.00 40,800.00 22,000.00 Date April 30th Credit Accounts Receivable Debit 1,600.00 Account Commissions Earned Balance 1,600.00 Office Supplies Credit Date April 3rd April 30th Account Cash Office Supplies Expense Debit 1,300.00 Balance 1,300.00 600.00 700.00 Prepaid Insurance Credit Date April 10th April 30th Account Cash Insurance Expense Debit 2,800.00 Balance 2,800.00 2,644.00 156.00

Date April 1st Credit Computer Equipment Debit 30,000.00 Account J. Nozomi, Capital Balance 30,000.00 Date April 30th Accumulated Depreciation-Computer Equip. Account Debit Credit Depreciation Expense-Computer Equip. 400.00 Balance 400.00 Salaries Payable Debit Date April 30th Account Salaries Expense Credit 320.00 Balance 320.00 J. Nozomi, Capital Debit Date April 1st April 1st April 30th April 30th Account Cash Computer Equipment Income Summary Dividends Credit 32,000.00 30,000.00 14,624.00 Balance 32,000.00 62,000.00 76,624.00 74,924.00 1,700.00 Dividends Credit Date April 30th Account Cash Debit 1,700.00 Balance 1,700.00 Salaries Expense Credit Date April 14th April 28th April 30th Account Cash Cash Salaries Payable Debit 1,500.00 1,500.00 320.00 Balance 1,500.00 3,000.00 3,320.00

Insurance Expense Credit Date April 30th Account Prepaid Insurance Debit 156.00 Balance 156.00 Rent Expense Date Debit Credit Account Cash Balance 2,800.00 April 2nd 2,800.00 Date April 30th Credit Office Supplies Expense Debit 700.00 Account Office Supplies Balance 700.00 Repairs Expense Credit Date April 29th Account Cash Debit 300.00 Balance 300.00 Telephone Expense Credit Date April 30th Account Cash Debit 1,300.00 Balance 1,300.00 Commission Earned Debit Date April 24th April 30th Account Cash Accounts Receivable Credit Balance 22,000.00 22,000.00 1,600.00 23,600.00 Date April 30th Depreciation Expense-Computer Equip. Account Debit Accumulated Depreciation-Computer Equip. 400.00 Credit Balance 400.00

Credit Debit Credit 23,600.00 Debit 40,800.00 1,600.00 600.00 2,644.00 30,000.00 Date April 30th April 30th April 30th April 30th April 30th April 30th April 30th April 30th Answer 4- Adjusted Trial Balance Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equipment Accumulated Depreciation-Computer Equip. Salaries Payable J. Nozomi, Capital Dividends Commission Earned Depreciation Expense-Computer Equip. Salaries Expense Insurance Expense Rent Expense Office Supplies Expense Repairs Expense Telephone Expense Total Income Summary Account Commission Earned Depreciation Expense-Computer Equip. Salaries Expense Insurance Expense Rent Expense Office Supplies Expense Repairs Expense Telephone Expense 400.00 320.00 62,000.00 Balance 23,600.00 23,200.00 19,880.00 19,724.00 16,924.00 16,224.00 15,924.00 14,624.00 400.00 3,320.00 156.00 2,800.00 700.00 300.00 1,300.00 A 1,700.00 23,600.00 400.00 3,320.00 156.00 2,800.00 700.00 300.00 1,300.00 86,320.00 86,320.00

Amount Answer 5 b-Statement of Owner's capital J. Nozomi, Capital Add: Net Income Less: Dividends J. Nozomi, Capital April 30, 2017 62,000.00 14,624.00 1,700.00 74,924.00 23,600.00 Answer 5 a-Income Statement Particulars Revenues Commission Earned Expenses Depreciation Expense-Computer Equip. Salaries Expense Insurance Expense Rent Expense Office Supplies Expense Repairs Expense Telephone Expense Total Expenses Net Income 400.00 3,320.00 156.00 2,800.00 700.00 300.00 1,300.00 8,976.00 14,624.00 Answer 5 c-Balance Sheet Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equipment Accumulated Depreciation-Computer Equip. Total Assets Liabilities Salaries Payable Total Liabilities Amount 40,800.00 1,600.00 600.00 2,644.00 30,000.00 (400.00) 75,244.00 320.00 320.00 J. Nozomi, Capital Total Equity Total Liabilities & Equity 74,924.00 74,924.00 75,244.00

Credit Debit 23,600.00 23,600.00 8,976.00 Answer 6 a- Closing Entries 1 Date Account 2 April 30th Commission Earned 3 Income Summary 4 5 April 30th Income Summary 6 Depreciation Expense-Computer Equip. 7 Salaries Expense 3 Insurance Expense 9 Rent Expense Office Supplies Expense 1 Repairs Expense 2 Telephone Expense 3 4 April 30th Income Summary 5 J. Nozomi, Capital 6 7 April 30th J. Nozomi, Capital 3 Drawings 400.00 3,320.00 156.00 2,800.00 700.00 300.00 1,300.00 14,624.00 14,624.00 1,700.00 1,700.00 Credit 1 2 3 4 5 6 7 8 9 Answer 7- Post Closing Trial Balance Cash Accounts Receivable Office Supplies Prepaid Insurance Computer Equipment Accumulated Depreciation-Computer Equip. Salaries Payable J. Nozomi, Capital Total Debit 40,800.00 1,600.00 600.00 2,644.00 30,000.00 400.00 320.00 74,924.00 75,644.00 75,644.00