On April 1, 2010, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
| April 1 | Nozomi invested $30,000 cash and computer equipment worth $20,000 in the business. |
| 2 |
Rented furnished office space by paying $1,800 cash for the first month’s (April) rent. (Hint: Adventure Travel debited Rent Expense for this payment.) |
| 3 | Purchased $1,000 of office supplies for cash. |
| 10 | Paid $2,400 cash for the premium on a 12 month insurance policy. Coverage begins on April 11. |
| 14 | Paid $1,600 cash for two weeks’ salaries earned by employees. |
| 24 | Collected $8,000 cash on commissions from airlines on tickets obtained for customers. |
| 26 | Paid another $1,600 cash for two weeks’ salaries earned by employees. |
| 27 | Paid $350 cash for minor repairs to the company’s computer. |
| 27 | Paid $750 cash for this month’s telephone bill. |
| 28 | Nozomi withdrew $1,500 cash for personal use. |
| The company’s chart of accounts follows: |
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation Expense”Computer Equip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | Accumulated Depreciation”Computer Equip. | 650 | Office Supplies Expense |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 301 | J. Nozomi, Capital | 688 | Telephone Expense |
| 302 | J. Nozomi, Withdrawals
1 Prepare journal entries to record the transactions for April. The company records prepaid and unearned items in balance sheet accounts 2 Prepare an unadjusted trial balance as of April 30. 3 Use the following information to journalize and post adjusting entries for the month 4 Prepare the income statement and the statement of owner’s equity for the month of April and the balance sheet at April 30, 2010.
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901 | Income Summary |