On April 1, 2015,
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 company.
2 The company rented
furnished office space by paying $1,800 cash for the first month’s (April)
rent.
3 The company
purchased $1,000 of office supplies for cash.
10 The company paid
$2,400 cash for the premium on a 12-month insurance policy. Coverage begins on
April 11.
14 The company paid
$1,600 cash for two weeks’ salaries earned by employees.
24 The company
collected $8,000 cash on commissions from airlines on tickets obtained for customers.
28 The company paid
$1,600 cash for two weeks’ salaries earned by employees.
29 The company paid
$350 cash for minor repairs to the company’s computer.
30 The company paid
$750 cash for this month’s telephone bill.
30 Nozomi withdrew
$1,500 cash from the company for personal use.
The company’s chart
of accounts follows:
101 Cash 405
Commission Earned
106 Accounts receivable 612 Depreciation Exp
(Computer)
124 Office Supplies 622 Salaries
Expense
128 Prepaid Insurance 637 Insurance Expense
167 Computer Equipment 640 Rent Expense
168 Accumulated Depreciation(Computer) 650
Office Supplies Expense
209 Salaries payable 684 Repair
Expense
301 J. Nazami Capital 688 Telephone
Expense
302 J. Nazami withdrawals 901
Income Summary
Required
2. Prepare journal
entries to record the transactions for April and post them to the ledger
accounts. The company records prepaid and unearned items in balance sheet
accounts.
3. Prepare an
unadjusted trial balance as of April 30.
Part 2 — Transactions for April
April 1 Cash............................................................................ 101 30,000
Computer
Equipment................................................ 167 20,000
J.
Nozomi, Capital............................................. 301 50,000
Owner
invested in the business.
2 Rent Expense............................................................ 640
1,800
Cash................................................................... 101 1,800
Paid one
month’s rent.
3 Office Supplies.............................................................. 124 1,000
Cash................................................................... 101 1,000
Acquired
office supplies.
10 Prepaid
Insurance........................................................ 128 2,400
Cash................................................................... 101 2,400
Paid 12
months’ premium in advance.
14 Salaries Expense.......................................................... 622 1,600
Cash................................................................... 101 1,600
Paid two
weeks’ salaries.
24 Cash............................................................................ 101 8,000
Commissions
Earned...................................... 405 8,000
Collected
commissions from airlines.
28 Salaries Expense...................................................... 622 1,600
Cash................................................................... 101 1,600
Paid two
weeks’ salaries.
29 Repairs Expense....................................................... 684 350
Cash................................................................... 101 350
Repaired
the computer.
30 Telephone Expense.................................................. 688 750
Cash................................................................... 101 750
Paid the telephone bill.
30 J. Nozomi, Withdrawals............................................ 302 1,500
Cash................................................................... 101 1,500
Owner withdrew cash.
Part 3
ADVENTURE TRAVEL
Unadjusted Trial Balance
April 30, 2015
No. Account
Title Debit Credit
101 Cash...................................................................... $27,000
106 Accounts
receivable............................................ 0
124 Office
supplies..................................................... 1,000
128 Prepaid
insurance............................................... 2,400
167 Computer
equipment.......................................... 20,000
168 Accumulated
depreciation—.............................
Computer equipment........................................ $ 0
209 Salaries
payable.................................................. 0
301 J.
Nozomi, Capital................................................ 50,000
302 J.
Nozomi, Withdrawals...................................... 1,500
405 Commissions
earned.......................................... 8,000
612 Depreciation
expense—
Computer equipment........................................ 0
622 Salaries
expense................................................. 3,200
637 Insurance
expense............................................. 0
640 Rent
expense....................................................... 1,800
650 Office
supplies expense..................................... 0
684 Repairs
expense.................................................. 350
688 Telephone
expense............................................ 750
Totals..................................................................... $58,000
$58,000
