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
6. Prepare journal
entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing
trial balance.
Part
6
Closing
entries
April 30 Commissions Earned................................................. 405 9,750
Income
Summary.............................................. 901 9,750
To close
the revenue account.
30 Income Summary......................................................... 901 7,553
Depreciation
Exp–Computer Equip.............. 612 500
Salaries
Expense............................................. 622 3,620
Insurance
Expense.......................................... 637 133
Rent
Expense................................................... 640 1,800
Office
Supplies Expense................................ 650 400
Repairs
Expense.............................................. 684 350
Telephone
Expense......................................... 688 750
To close
the expense accounts.
30 Income Summary......................................................... 901 2,197
J.
Nozomi, Capital............................................. 301 2,197
To close
the Income Summary account.
30 J. Nozomi,
Capital........................................................ 301 1,500
J.
Nozomi, Withdrawals................................... 302 1,500
To close
the withdrawals account.
Part 7
aDVENTURE TRAVEL
Post-Closing Trial Balance
April 30, 2015
Debit Credit
Cash...................................................................... $27,000
Accounts receivable............................................ 1,750
Office supplies..................................................... 600
Prepaid insurance............................................... 2,267
Computer equipment.......................................... 20,000
Accumulated depreciation–
Computer equipment........................................ $ 500
Salaries payable.................................................. 420
J. Nozomi, Capital................................................ _______ 50,697
Totals..................................................................... $51,617
$51,617
