Problem 3-5A (Algo) Applying the accounting cycle LO P1, P3, P4, P5, P6 On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 2 Nozomi invested $47,000 cash and computer equipment worth $30,000 in the company in exchange for its common stock. April 3 The company rented furnished office space by paying $2,900 cash for the first month's (April) rent. April 4 The company purchased $1,600 of office supplies for cash. April 10 The company paid $1,980 cash for a 12-month insurance policy. Coverage begins on April 11. April 14 The company paid $1,500 cash for two weeks' salaries earned by employees. April 24 The company collected $11,000 cash for commissions revenue. April 28 The company paid $1,500 cash for two weeks' salaries earned by employees. April 29 The company paid $250 cash for minor repairs to computer equipment. April 30 The company paid $1,300 cash for this month's telephone bill. April 30 The company paid $1,570 cash in dividends. The company's chart of accounts follows: 101 Cash 106 Accounts Receivable 403 612 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment Salaries Payable 168 209 307 318 Retained Earnings 319 Dividends Common Stock 622 637 640 Rent Expense Accumulated Depreciation-Computer Equipment 650 Commissions Revenue Depreciation Expense-Computer Equipment Salaries Expense Insurance Expense Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary Use the following information to prepare adjusting entries: a. Prepaid insurance of $110 expired this month. b. At the end of the month, $700 of office supplies are still available. c. This month's depreciation on computer equipment is $400. d. Employees earned $340 of unpaid and unrecorded salaries as of month-end. e. The company earned $2,100 of commissions revenue that is not yet recorded at month-end. Required: 1. & 2. Prepare journal entries to record the transactions for April and post them to ledger accounts in Requirement 6B GL tab. The company records prepaid and unearned items in balance sheet accounts. 3. Using account balances from Requirement 6B GL tab, prepare an unadjusted trial balance as of April 30. 4. Journalize the adjusting entries for the month, and then post to the ledger on Requirement 6B GL tab, using April 30 Adjusted as the date. 5a. Using adjusted account balances from Requirement 68 GL tab, prepare an adjusted trial balance as of April 30. 5b. Prepare the income statement for the month of April 30. 5c. Prepare the statement of retained earnings for the month of April 30. 5d. Prepare the balance sheet at April 30. 6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6B GL tab, using April 30 Close as the date. 6b. Post the journal entries to the ledger. 7. Prepare a post-closing trial balance. Journal entry worksheet 1 2 3 4 Record the entry to close the revenue account(s). Note: Enter debits before credits. Date April 30 General Journal Debit Credit Commissions revenue 13,100 Income summary 13,100 View general journal Record entry Clear entry Journal entry worksheet 1 2 3 4 Record the entry to close the expense account(s). Note: Enter debits before credits. Date April 30 General Journal Income summary Depreciation expense-Computer equipment Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense Telephone expense Debit Credit > 400 3,340 110 2,900 700 250 1,300 View general journal Record entry Clear entry Journal entry worksheet < 1 2 3 4 Record the entry to close the income summary. Note: Enter debits before credits. Date April 30 General Journal Debit Credit Income summary Retained earnings Record entry Clear entry View general journal > Journal entry worksheet < 1 2 3 4 Record the entry to close the dividends account. Note: Enter debits before credits. Date April 30 General Journal Debit Credit Retained earnings 1,570 Dividends 1,570 Record entry Clear entry View general journal