Problem 4-2A Applying the accounting cycle LO C1, C2, P2, P3

[The following information applies to the questions displayed below.]

On April 1, 2013, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the companys first month.

April 1	Nozomi invested $38,000 cash and computer equipment worth $25,000 in the company.
2	The company rented furnished office space by paying $1,500 cash for the first months (April) rent.
3	The company purchased $1,300 of office supplies for cash.
10	The company paid $2,200 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.
14	The company paid $1,800 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 $1,800 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 $1,150 cash for this month's telephone bill.
30	Nozomi withdrew $1,600 cash from the company for personal use.

The company's chart of accounts follows:

101	Cash	405	Commissions Earned
106	Accounts Receivable	612	Depreciation ExpenseComputer Equip.
124	Office Supplies	622	Salaries Expense
128	Prepaid Insurance	637	Insurance Expense
167	Computer Equipment	640	Rent Expense
168	Accumulated DepreciationComputer Equip.	650	Office Supplies Expense
209	Salaries Payable	684	Repairs Expense
301	J. Nozomi, Capital	688	Telephone Expense
302	J. Nozomi, Withdrawals	901	Income Summary

Use the following information:

a.	Two-thirds (or $122) of one months insurance coverage has expired.
b.	At the end of the month, $500 of office supplies are still available.
c.	This months depreciation on the computer equipment is $500.
d.	Employees earned $550 of unpaid and unrecorded salaries as of month-end.
e.	The company earned $1,950 of commissions that are not yet billed at month-end.

rev: 06_24_2014_QC_50802, 10_27_2014_QC_56632

References

Section BreakProblem 4-2A Applying the accounting cycle LO C1, C2, P2, P3

3.

value: 1.11 points

Required information

Problem 4-2A Part 1 & 2

Required:

1.	The general ledger and all the necessary accounts are provided in Part 6.2. Post all journal entries, adjusting entries and closing entries to the general ledger given in Part 6.2
2.	Prepare journal entries to record the transactions for April and post them to the ledger accounts in Part 6.2. The company records prepaid and unearned items in balance sheet accounts.

References

eBook & Resources

WorksheetLearning Objective: 04-C1 Explain why temporary accounts are closed each period.Learning Objective: 04-P3 Explain and prepare a post-closing trial balance.

Problem 4-2A Part 1 & 2Learning Objective: 04-C2 Identify steps in the accounting cycle.

Difficulty: HardLearning Objective: 04-P2 Describe and prepare closing entries.

Check my work

4.

value: 1.11 points

Required information

Problem 4-2A Part 3

3.	Using account balances from part 6.2, prepare an unadjusted trial balance as of April 30.

References

eBook & Resources

WorksheetLearning Objective: 04-C1 Explain why temporary accounts are closed each period.Learning Objective: 04-P3 Explain and prepare a post-closing trial balance.

Problem 4-2A Part 3Learning Objective: 04-C2 Identify steps in the accounting cycle.

Difficulty: HardLearning Objective: 04-P2 Describe and prepare closing entries.

Check my work

5.

value: 1.11 points

Required information

Problem 4-2A Part 4

4.	Journalize the adjusting entries for the month and then post to section 6.2. (Do not round intermediate calculations.)

References

eBook & Resources

WorksheetLearning Objective: 04-C1 Explain why temporary accounts are closed each period.Learning Objective: 04-P3 Explain and prepare a post-closing trial balance.

Problem 4-2A Part 4Learning Objective: 04-C2 Identify steps in the accounting cycle.

Difficulty: HardLearning Objective: 04-P2 Describe and prepare closing entries.

Check my work

6.

value: 1.11 points

Required information

Problem 4-2A Part 5

5.1	Prepare the income statement for the month of April 30, 2013.

5.2	Prepare the statement of owner's equity for the month of April 30, 2013.

5.3	Prepare the balance sheet at April 30, 2013.

rev: 06_24_2014_QC_50802

References

eBook & Resources

WorksheetLearning Objective: 04-C1 Explain why temporary accounts are closed each period.Learning Objective: 04-P3 Explain and prepare a post-closing trial balance.

Problem 4-2A Part 5Learning Objective: 04-C2 Identify steps in the accounting cycle.

Difficulty: HardLearning Objective: 04-P2 Describe and prepare closing entries.

Check my work

7.

value: 1.11 points

Required information

Problem 4-2A Part 6

6.1	Prepare journal entries to close the temporary accounts and then post to section 6.2.

6.2	Post the journal entries to the ledger.

6.3	Prepare the adjusted trial balance as of April 30.

rev: 10_27_2014_QC_56632, 10_30_2014_QC_56632

References

eBook & Resources

WorksheetLearning Objective: 04-C1 Explain why temporary accounts are closed each period.Learning Objective: 04-P3 Explain and prepare a post-closing trial balance.

Problem 4-2A Part 6Learning Objective: 04-C2 Identify steps in the accounting cycle.

Difficulty: HardLearning Objective: 04-P2 Describe and prepare closing entries.

Check my work

8.

value: 1.11 points

Required information

Problem 4-2A Part 7

7.	Prepare a post-closing trial balance. (Please prepare your trial balance in chart of accounts order given in the question.)

References

eBook & Resources