ON April 1,2005 jennifer Stafford created a new travel agency.See-It-Now Travel. The following transactions occurred during the company’s first month:
April 1 stafford invested 20,000 cash and computer equipment worth 40,000 in the business in exchange for its common stock
2 rented furnished office space by paying 1700 cash for the first month (april) rent
3 purchased 1,100 of office supplies for cash
10 paid 3,600 cash for the premium on a 12 month insurance policy. Coverage begins on april 11
14 paid 1,900 cash for two weeks salaries earned by employees
24 collected 7,900 cash on commissions from airline on tickets obtained for customers
28 paid another 1,800 cash for two weeks salaries earned by employees
29 paid 250 cash for minor repairs to the company’s computer.
30 paid 650 cash for this month’s telephone bill
30 paid 1500 cash for dividends.
2. Prepare journal entries to record the transactions for april and post them into the ledger accounts. The company records prepaid and unearned item in balance sheet accounts
3.prepare an unadjusted trial balance as of april 30
4 use the following information to journalize and post adjusting entries for the month:
a. Two thirds of one month’s insurance coverage has expired.
b. At the end of the month, 700 of office supplies are still available.
c. This month’s depreciation on the computer equipment is 600
d. Employees earned 320 of unpaid and unrecorded salaries as of month-end
e. The company earned 1,650 of commissions that are not yet billed at month-end.
5. prepare the income statement and the statement of retained earnings for the month of april and the balance sheet at april 30,2005
6. prepare journal entries to close the temporary accounts and post there entries to the ledger.
7.prepare a post-closing trial balance.