Problem 04-01 Name: Ahmed Chaudhry Fall 2012 Note: Ledger Ac

Problem 04-01 Name: Ahmed Chaudhry fall 2012 NOTE: Ledger accounts begin at cell A172, and show all entries that need to be posted. Given Data: Instructions: SEE-IT-NOW TRAVEL SEE-IT-NOW TRAVEL 1. Analyze, journalize, and post daily transactions. General Journal 2. Prepare an unadjusted trial balance (general ledger balances Date Account Titles Trans. No. Debit Credit Apr 1 Stafford invested cash $ 20,000 after daily transactions but before adjusting entries). Transactions for April (Part 2): 1 Stafford invested computer equipment 40,. Analyze, journalize, and post adjusting entries. Apr 1 Cash , Paid first month's rent 1,700 (See adjustment data below Chart of Accounts.) Computer Equipment 40, Purchased office supplies 1,.

Prepare an adjusted trial balance (general ledger balances after J. Stafford,Capital 60,000 «- Correct! 10 Paid annual insurance premium 3,600 adjusting entries but before closing entries). 2 Rent Expense 56 1, Paid salaries 1,. Prepare the financial statements: income statement, Cash 1,700 «- Correct!

24 Collected commissions earned 7,900 statement of owner's equity, and balance sheet. 3 Office Supplies 57 1, Paid salaries 1,. Analyze, journalize, and post closing entries. Cash 1,100 «- Correct! 29 Paid for computer repair .

Prepare the post-closing trial balance. 10 Prepaid Insurance 58 3, Paid telephone bill 650 Note: All forms are below the General Journal. Be sure Cash 3,600 «- Correct! 30 Stafford withdrew cash for personal use 1,500 to use the following account names (exactly as they are 14 Salaries Expense 59 1,800 listed). Cash 1,800 «- Correct!

Adjustment data for April 30: Chart of Accounts 24 Cash 60 7,900 a. 2/3 of a month's insurance consumed $ ? 101 Cash Commissions Earned 7,900 «- Correct! b. Office supplies on hand Accounts Receivable 28 Salaries Expense 61 1,800 c. Depreciation on computer Office Supplies Cash 1,800 «- Correct! d.

Unpaid salaries Prepaid Insurance 29 Repairs Expense e. Commissions earned but not billed 1, Computer Equipment Cash 250 «- Correct! 168 Accumulated Depreciation, Computer Equipment 30 Telephone Expense Check figures: 209 Salaries Payable Cash 650 «- Correct! (2) Unadjusted trial balance totals $ 67, J. Stafford, Capital 30 J. Stafford, Withdrawals 64 1,a) Debit Insurance expense J.

Stafford, Withdrawals Cash 1,500 «- Correct! (5) Net income 1, Commissions Earned Adjusting Entries (Part 4): Capital (4/30/XXX, Depreciation, Computer Equipment Apr 30 Insurance Expense Total assets 60, Salaries Expense Prepaid Insurance 200 «- Correct! (7) Post-closing trial balance totals 61, Insurance Expense 30 Office Supplies Expense Rent Expense Office Supplies 400 «- Correct! 650 Office Supplies Expense 30 Depreciation Expense, Computer Equipment Repairs Expense 250 Accumulated Depreciation, Computer Equipment 600 «- Correct! 688 Telephone Expense 30 Salaries Expense Income Summary Salaries Payable 320 «- Correct! 30 Accounts Receivable 69 1,650 Commissions Earned 1,650 «- Correct! Closing Entries (Part 6) Apr 30 Commissions Earned 70 9,550 Income Summary 9,550 «- Correct!

30 Income Summary 71 7,720 Depreciation Expense, Computer Equipment 600 «- Correct! Salaries Expense 3,920 «- Correct! Insurance Expense 200 «- Correct! Rent Expense 1,700 «- Correct! Office Supplies Expense 400 «- Correct!

Repairs Expense 250 «- Correct! Telephone Expense 650 «- Correct! 30 Income Summary 72 1,830 J. Stafford, Capital 1,830 «- Correct! 30 J.

Stafford, Capital 73 1,500 J. Stafford, Withdrawals 1,500 «- Correct! SEE-IT-NOW TRAVEL Unadjusted Trial Balance April 30, XXX5 Account Titles Debits Credits Cash $ 15,500 Accounts receivable Office supplies 1,100 Prepaid insurance 3,600 Computer equipment 40,000 Accumulated depreciation, computer equipment Salaries payable J. Stafford, Capital $ 60,000 J. Stafford, Withdrawals 1,500 Commissions earned 7,900 Depreciation, computer equipment Salaries expense 3,600 Insurance expense Rent expense 1,700 Office supplies expense Repairs expense 250 Telephone expense 650 Totals $ 67,900 $ 67,900 Correct!

Correct! SEE-IT-NOW TRAVEL Adjusted Trial Balance April 30, XXX5 Account Titles Debits Credits Cash - 0 Accounts receivable Office supplies Prepaid insurance Computer equipment Accumulated depreciation, computer equipment Salaries payable J. Stafford, Capital J. Stafford, Withdrawals Commissions earned Depreciation, computer equipment Salaries expense Insurance expense Rent expense Office supplies expense Repairs expense - 0 Total assets $ - 0 $ - 0 Try again! Try again!

SEE-IT-NOW TRAVEL Income Statement For Month Ended April 30, XXX5 Commissions earned $9,550 Expenses: Depreciation expense, computer equipment $600 Salaries expense 3,920 Insurance expense 200 Rent expense 1,700 Office supplies expense 400 Repairs expense 250 Telephone expense 650 Total expense 7,720 Net income $1,830 Correct! SEE-IT-NOW TRAVEL Statement of Owner's Equity For Month Ended April 30, XXX5 J. Stafford, Capital, April 1, 2005 $0 Plus: Investment by owner $60,000 Net income 1,,830 Total $ 61,830 Less withdrawals (1,500) J. Stafford, Capital, April 30, 2005 $ 60,330 Correct! SEE-IT-NOW TRAVEL Balance Sheet April 30, XXX5 Assets Cash $15,500 Accounts receivable 1,650 Office supplies 700 Prepaid insurance 3,400 Computer equipment $40,000 Accumulated depreciation, computer equipment (600) Total assets $60,650 Liabilities Salaries payable $ 320 Owner's Equity J.

Stafford, Capital 60,330 Total liabilities and equity $ 60,650 Correct! SEE-IT-NOW TRAVEL Post-Closing Trial Balance April 30, XXX5 Account Titles Debits Credits Cash $ 15,500 Accounts receivable 1,650 Office supplies 700 Prepaid insurance 3,400 Computer equipment 40,000 Accumulated depreciation, computer equipment $ 600 Salaries payable 320 J. Stafford, Capital 60,330 Totals $ 61,250 $ 61,250 Correct! Correct! SEE-IT-NOW TRAVEL Note: Compute "Balance" after each posting.

General Ledger Cash Account No. 101 Trans. Date Explanation no. Debit Credit Balance Apr 1 GJ,, GJ,, GJ,, GJ,, GJ,, GJ60 7,, GJ,, GJ, GJ, GJ,,500 «- Correct! Accounts Receivable Account No.

106 Trans. Date Explanation no. Debit Credit Balance Apr 30 GJ69 1,,650 «- Correct! Office Supplies Account No. 124 Trans.

Date Explanation no. Debit Credit Balance Apr 3 GJ57 1,, Adjusting GJ «- Correct! Prepaid Insurance Account No. 128 Trans. Date Explanation no.

Debit Credit Balance Apr 10 GJ, Adjusting GJ,400 «- Correct! Computer Equipment Account No. 167 Trans. Date Explanation no. Debit Credit Balance Apr 1 GJ,,000 «- Correct!

Accumulated Depreciation, Computer Equipment Account No. 168 Trans. Date Explanation no. Debit Credit Balance Apr 30 Adjusting GJ «- Correct! Salaries Payable Account No.

209 Trans. Date Explanation no. Debit Credit Balance Apr 30 Adjusting GJ «- Correct! J. Stafford, Capital Account No.

301 Trans. Date Explanation no. Debit Credit Balance Apr 1 GJ,, Closing GJ,, Closing GJ73 1,,330 «- Correct! J. Stafford, Withdrawals Account No.

302 Trans. Date Explanation no. Debit Credit Balance Apr 30 GJ64 1,, Closing GJ, «- Correct! Commissions Earned Account No. 405 Trans.

Date Explanation no. Debit Credit Balance Apr 24 GJ,, Adjusting GJ,, Closing GJ70 9, «- Correct! Depreciation Expense, Computer equipment Account No. 612 Trans. Date Explanation no.

Debit Credit Balance Apr 30 Adjusting GJ Closing GJ «- Correct! Salaries Expense Account No. 622 Trans. Date Explanation no.

Debit Credit Balance Apr 14 GJ59 1,, GJ61 1,, Adjusting GJ, Closing GJ, «- Correct!

Insurance Expense Account No. 637 Trans. Date Explanation no. Debit Credit Balance Apr 30 Adjusting GJ Closing GJ «- Correct! Rent Expense Account No.

640 Trans. Date Explanation no. Debit Credit Balance Apr 2 GJ56 1,, Closing GJ, «- Correct! Office Supplies Expense Account No. 650 Trans.

Date Explanation no. Debit Credit Balance Apr 30 GJ Closing GJ «- Correct! Repairs Expense Account No. 684 Trans. Date Explanation no.

Debit Credit Balance Apr 29 GJ Closing GJ «- Correct! Telephone Expense Account No. 688 Trans. Date Explanation no. Debit Credit Balance Apr 30 GJ Closing GJ «- Correct!

Income Summary Account No. 901 Trans. Date Explanation no. Debit Credit Balance Apr 30 Closing GJ,, Closing GJ71 7,, Closing GJ72 1, «- Correct!

Paper For Above instruction

The provided data pertains to the accounting processes for SEE-IT-NOW TRAVEL for the month of April, 2012. It involves analyzing daily transactions, journalizing, posting to ledger accounts, preparing trial balances (unadjusted and adjusted), creating financial statements (income statement, statement of owner’s equity, balance sheet), and recording closing and post-closing trial balances. This comprehensive exercise aims to demonstrate proficiency in the entire accounting cycle, including recording initial transactions, adjusting entries based on various data, closing temporary accounts, and preparing final financial reports that accurately reflect the company's financial position and performance at month-end.

Paper For Above instruction

The accounting process for SEE-IT-NOW TRAVEL during April 2012 encompasses a systematic approach to recording, adjusting, and reporting financial data. It begins with the analysis of daily transactions, which include owner investments, purchases, payments of expenses, and collections of revenue. These entries are journalized and posted to respective ledger accounts, facilitating the compilation of a preliminary trial balance. The unadjusted trial balance provides a snapshot, but it requires refinement through adjusting entries, which account for accrued, deferred, and estimated expenses and revenues, such as depreciation, accrued salaries, insurance consumption, and unbilled commissions.

The adjusted trial balance, reflecting these corrections, forms the basis for preparing formal financial statements. The income statement summarizes revenues and expenses to determine net income for the period, here totaling $1,830. This profit increases owner’s equity, which is explicitly detailed in the statement of owner's equity, factoring in owner investments and withdrawals. The balance sheet presents the company’s assets, liabilities, and owner’s equity as of April 30, 2012, providing a comprehensive view of financial health.

Once the financial statements are prepared, closing entries are recorded to transfer temporary account balances (revenues and expenses) into the income summary, and subsequently into owner’s capital. This process resets the temporary accounts to zero, readying the books for the next accounting period. The closing entries confirm that the net income has been incorporated into owner’s equity, increasing the owner’s capital from initial investments and retained earnings.

Post-closing trial balance confirms that all temporary accounts are closed and only permanent accounts with balances remain. Throughout this process, adherence to accounting principles such as consistency, accuracy, and proper classification ensures the integrity of the financial statements. Financial analysis of this exercise reveals the company's profitability, asset management, and solvency status, crucial for stakeholders’ decision-making.

References

• Accounting Principles: A Business Perspective, 11th Edition, Roger H. Hermanson, James Don Edwards, Michael W. Maher
• Financial Accounting, 12th Edition, Walter T. Harrison Jr., Charles T. Horngren
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• Accounting Cycle and Financial Statements, American Institute of CPAs (AICPA) Publications
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• CPA Exam Review, Wiley CPAexcel, Study Guide
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