4-1A

1. Balance Column Format

Cash NO 101
Date Explanation Debit Credit Balance
April 1 Invested cash 30,000 30,000
2 Rented furnished office space 1,800 28,200
3 Purchased office supplies 1,000 27,200
10 Paid cash for the premium on a 12-month insurance 200 27,000
policy
14 Paid salaries 1,600 25,400
24 Collected commission earned 8,000 33,400
28 Paid salaries 1,600 31,800
29 Paid minor repairs 350 31,450
30 Paid this month’s telephone bill 750 30,700
30 Nozomi’s withdrawal 1,500 29,200

Office Supplies NO 124

Date Explanation Debit Credit Balance
April 3 Purchased office supplies 1,000 1,000

Prepaid Insurance NO 128

Date Explanation Debit Credit Balance
April 14 Paid for the premium on a 12-month insurance 200 200
policy

Computer Equipment NO 167

Date Explanation Debit Credit Balance
April 1 Invested computer equipment 20,000 20,000

J. Nozomi, Capital NO 301

Date Explanation Debit Credit Balance
April 1 Invested cash and office equipment 50,000 50,000

J. Nozomi, Withdrawals NO 302

Date Explanation Debit Credit Balance
April 30 Nozomi withdrew cash for personal use 1,500 1,500

Commissions Earned NO 405

Date Explanation Debit Credit Balance
April 24 Collected cash for commissions earned 8,000 8,000

Depreciation Expense – Computer Equip NO 612

Date Explanation Debit Credit Balance
April 29 Paid for minor repairs to the company’s computer 350 350
 Salaries Expense NO 622
Date Explanation Debit Credit Balance
April 14 Paid salaries 1,600 1,600
28 Paid salaries 1,600 3,200

Insurance Expense NO 637

Date Explanation Debit Credit Balance
April 10 Paid cash for the premium on a 12-month insurance 200 200
policy

Rent Expense NO 640

Date Explanation Debit Credit Balance
April 2 Rented furnished office space 1,800 1,800

Office Supplies Expense NO 650

Date Explanation Debit Credit Balance
April 3 Purchased office supplies 1,000 1,000

Repairs Expense NO 684

Date Explanation Debit Credit Balance
April 29 Paid for minor repairs to the company’s computer 350 350

Telephone Expense NO 688

Date Explanation Debit Credit Balance
April 30 Paid for this month’s telephone bill 750 750

Income Summary NO 901

Date Explanation Debit Credit Balance
April 24 Collected cash for commission earned 8,000 8,000

2. Journal Entries

Date Account Titles and Explanation Ref Debit Credit

April 1 Cash 101 30,000
Computer Equipment 167 20,000
J. Nozomi, Capital 301 50,000
(invested cash and computer equipment)
2 Rent Expense 640 1,800
Cash 101 1,800
(rented furnished office space by cash)
3 Office Supplies Expense 650 1,000
Cash 101 1,000
(purchased office supplies for cash)
10 Insurance Expense 637 2,400
 Cash 101 2,400
(paid cash on a 12-month insurance policy)
14 Salaries Expense 622 1,600
Cash 101 1,600
(paid salaries)
24 Cash 101 8,000
Commission Earned 405 8,000
(collected cash for commission earned)
28 Salaries Expense 622 1,600
Cash 101 1,600
(paid salaries)
29 Repairs Expense 684 350
Cash 101 350
(paid cash for minor repairs to the company’s computer)
30 Telephone Expense 688 750
Cash 101 750
(paid cash for this month’s telephone bill)
30 J. Nozomi, Withdrawals 302 1,500
Cash 101 1,500
(Nozomi withdrew cash for personal use)

Ledger Accounts

Cash NO 101
Date Explanation Ref Debit Credit Balance
April 1Invested cash G1 30,000 30,000
2Purchased furnished office space G1 1,800 28,200
3Purchased office supplies G1 1,000 27,200
10 Paid cash on a 12-month insurance policy G1 2400 24,800
14 Paid salaries G1 1,600 23,200
24 Collected cash for commission earned G1 8,000 31,200
28 Paid salaries G1 1,600 29,600
29 Paid for minor repairs to the company’s G1 350 29,250
computer
30 Paid for this month’s telephone bill G1 750 28,500
30 Nozomi withdrew cash for personal use G1 1,500 27,000

Computer Equipment NO 167

Date Explanation Ref Debit Credit Balance
April 1 Invested computer equipment G1 20,000 20,000

J. Nozomi, Capital NO 301

Date Explanation Ref Debit Credit Balance
April 1 Invested cash and computer equipment G1 50,000 50,000

J. Nozomi, Withdrawals NO 302

Date Explanation Ref Debit Credit Balance
April 30 Withdrawal for personal use G1 1,500 1,500
 Commissions Earned NO 405
Date Explanation Ref Debit Credit Balance
April 24 Collected cash for commission earned G1 8,000 8,000

Salaries Expense NO 622

Date Explanation Ref Debit Credit Balance
April 14 Paid salaries G1 1,600 1,600
28 Paid salaries G1 1,600 3,200

Rent Expense NO 640

Date Explanation Ref Debit Credit Balance
April 2 Rented furnished office space G1 1,800 1,800

Office Supplies Expense NO 650

Date Explanation Ref Debit Credit Balance
April 3 Purchased office supplies G1 1,000 1,000

Repairs Expense NO 684

Date Explanation Ref Debit Credit Balance
April 29 Paid for minor repairs to the company’s G1 350 350
computer

Telephone Expense NO 688

Date Explanation Ref Debit Credit Balance
April 30 Paid for this month’s telephone bill G1 750 750

Balance Sheet

Adventure Travel
Balance Sheet
April 30
Assets Equity
Prepaid Insurance $ 2,400 Insurance Expense $ 2,400
Total Assets $ 2,400 Total Equity $2,400

3. Unadjusted Trial Balance

Adventure Travel
Unadjusted Trial Balance
April 30
Debit Credit
Cash $ 27,000
Computer Equipment 20,000
J. Nozomi, Capital $ 50,000
 J. Nozomi, Withdrawals 1,500
Commissions Earned 8,000
Salaries Expense 3,200
Insurance Expense 2,400
Rent Expense 1,800
Office Supplies Expense 1,000
Repairs Expense 350
Telephone Expense 750
Totals 58,000 58,000

4. Adjusting Entries

Date Explanation Ref Debit Credit

April 30 Insurance Expense 637 133
Prepaid Insurance 128 133
April 30 Office Supplies Expense 650 400
Office Supplies 124 400
(1000 – 600 = 400)
April 30 Depreciation Expense – Computer Equip 612 500
Accumulated Depreciation – Computer Equip 168 500
April 30 Salaries Expense 622 420
Salaries Payable 209 420
April 30 Commission Earned 405 1,750
Account Receivable 106 1,750

5. Adjusted Trial Balance

Adventure Travel
Adjusted Trial Balance
April 30
Debit Credit
Cash $27,000
Accounts Receivable 1,750
Office Supplies 600
Prepaid Insurance 2,267
Computer Equipment 20,000
Accumulated Depreciation – Computer Equip. 500
Salaries Payable 420
J. Nozomi, Capital 50,000
J. Nozomi, Withdrawals 1,500
Commissions Earned 9,750
Depreciation Expense – Computer Equip. 500
Salaries Expense 3,620
Insurance Expense 133
Rent Expense 1,800
Office Supplies Expense 400
Repairs Expense 350
Telephone Expense 750
Totals $60,670 $60,670
 Income Statement

Adventure Travel
Income Statement
For Month Ended April 30
$ $
Revenue
Commission Earned 9,750
Total Revenue 9,750

Expenses
Depreciation Expense 500
Salaries Expense 3,620
Insurance Expense 133
Rent Expense 1,800
Office Supplies Expense 400
Repairs Expense 350
Telephone Expense 750
Total Expense 7,553
Net Income 2,197

Statement of Changes in Equity

Adventure Travel
Statement of Changes in Equity
For Month Ended April 30
$ $
J. Nozomi, Capital 0
Plus: Investment by owner 50,000
Net income 2,197
52,197
Less: Withdrawals by owner 1,500
J. Nozomi, Capital 50,697

Balance Sheet

Adventure Travel
Balance Sheet
April 30
$ $
Current Assets
Cash 27,000
Account Receivable 1,750
Office Supplies 600
Prepaid Insurance 2,267 31,617
Non-current Assets
Equipment 20,000
Accumulated Depreciation – Equipment 500 19,500
Total Assets 51,117
 Liabilities and Equity
Liabilities
Salaries Payable 420 420
Equity
J. Nozomi, Capital 50,697
Total Liabilities and Equity 51,117

6. Closing Entries

Date Explanation Debit Credit

April 30 Commission Earned $9,750
Income Summary $9,750
30 Income Summary 7,553
Depreciation Expense – Equip 500
Salaries Expense 3,620
Insurance Expense 133
Rent Expense 1,800
Office Supplies Expense 400
Repair Expense 350
Telephone Expense 750
30 Income Summary 2,197
J. Nozomi, Capital 2,197
30 J. Nozomi, Capital 1,500
J. Nozomi, Withdrawals 1,500

7. Post-Closing Trial Balance

Adventure Travel
Post-Closing Trial Balance
April 30
Cash $27,000
Account Receivable 1,750
Supplies 600
Prepaid Insurance 2,267
Equipment 20,000
Accumulated Depreciation – Equipment $500
Salaries Payable 420
Owner’s Capital 50,697
51,617 51,617
4-2 A

1. 10-Column Work Sheet

Ace Construction Co.

Work Sheet
June 30, 2021
Unadjusted Adjustment Adjusted Income Balance
Trial Balance Trial Balance Statement Sheet &
Statement
of Changes
in Equity
NO Account Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr
101 Cash $18,5 $18, $18,
00 500 500
126 Supplies 9,900 $6,6 3,30 3,30
00 0 0
128 Prepaid 7,200 3,80 3,40 3,40
Insurance 0 0 0
167 Equipment 132,0 132, 132,
00 000 000
168 Accumulated $26, 8,40 $34, $34,
Depreciation 250 0 650 650
– Equipment
201 Account 6,80 650 7,45 7,45
Payable 0 0 0
203 Interest 0 250 250 250
Payable
208 Rent Payable 0 500 500 500
210 Wages 0 1,80 1,80 1,80
Payable 0 0 0
213 Property 0 1,00 1,00 1,00
Taxes 0 0 0
Payable
251 Long-term 25,0 25,0 25,0
Notes 00 00 00
Payable
301 V. Ace, 88,6 88,6 88,6
Capital 60 60 60
302 V. Ace, 33,00 33,0 33,0
Withdrawals 0 00 00
401 Construction 132, 132, $132
Fees Earned 100 100 ,100
612 Depreciation 0 $8,4 8,40 8,40
Expense – 00 0 0
Equipment
623 Wages 46,86 1,80 48,6 48,6
Expense 0 0 60 60
633 Interest 2,750 250 3,00 3,00
Expense 0 0
637 Insurance 0 3,80 3,80 3,80
 Expense 0 0 0
640 Rent 12,00 500 12,5 12,5
Expense 0 00 00
652 Supplies 0 6,60 6,60 6,60
Expense 0 0 0
683 Property 7,800 1,00 8,80 8,80
Taxes 0 0 0
Expense
684 Repairs 2,910 2,91 2,91
Expense 0 0
690 Utilities 5,890 650 6,54 6,54
Expense 0 0
Totals $278, $278 $23, $23, $291 $291 $101 $132 $190 $159
810 ,810 000 000 ,410 ,410 ,210 ,100 ,200 ,310
Net profit $30, $308
890 90
$132 $132 $190 $190
,100 ,100 ,200 ,200

2. Closing Entries

Date Explanation Debit Credit

June 30 Construction Fees Earned $132,100
Income Summary $132,100
30 Income Summary 101,210
Depreciation Expense – Equip. 8,400
Wages Expense 48,660
Interest Expense 3,000
Insurance Expense 3,800
Rent Expense 12,500
Supplies Expense 6,600
Property Taxes Expense 8,800
Repairs Expense 2,910
Utilities Expense 6,540
30 Income Summary 30,890
V. Ace, Capital 30,890
30 V. Ace, Capital 33,000
V. Ace, Withdrawals 33,000

(i) Income Statement

 Ace Construction Co.
Income Statement
For Month Ended June 30, 2021
 $ $
Revenue
Construction fees earned 132,100
Expenses
Depreciation expense – equip. 8,400
Wages expense 45,060
Interest expense 2,500
Insurance expense 3,800
Rent expense 11,500
Supplies expense 6,600
Property taxes expense 6,800
Repairs expense 2,910
Utilities expense 5,240
Total 101,210
Net income 30,890

(ii) statement of changes in equity

Ace Construction Co.

Statement of Changes in Equity
For Month Ended June 30, 2021
$ $
V. Ace, Capital June 1 0
Plus: Investment by owner 88,660
Net income 30,890
119,550
Less: withdrawals by owner 33,000
V. Ace, Capital June 30 86,550

(iii) balance sheet

Ace Construction Co.

Balance Sheet
June 30, 2021
Current Assets
Cash 18,500
Supplies 3,300
Prepaid insurance 3,400 25,200
Non-current asset
Equipment 13,200
Accumulated depreciation – equip (34,650) 97,350
Total Assets 122,550

Liabilities
Account payable 7,450
Interest payable 250
Rent payable 500
Wages expense 1,800
 Property taxes expense 1,000
Long-term note payable 25,000 36,000
Equity
V. Ace, Capital 86,550
122,550