
Concept explainers
Concept introduction:
In accounting,
comprises of either debit or credit transaction. The
Adjusted
Requirement 1:
To determine:
We have to determine the balance column format to open the ledger account.

Answer to Problem 1APSA
Solution:
Ledger accounts
101 Cash account | |||||
date | debit | credit | Balance | ||
0 |
301 Capital account | |||||
date | debit | credit | Balance | ||
0 |
167 Computer account | |||||
date | debit | credit | Balance | ||
0 |
688 Telephone expense account | |||||
date | debit | credit | Balance | ||
0 |
684 Repair expense account | |||||
date | debit | credit | Balance | ||
0 |
622 Salaries expense account | |||||
date | debit | credit | Balance | ||
0 |
405 Commission earned account | |||||
date | debit | credit | Balance | ||
0 |
128 Prepaid insurance account | |||||
date | debit | credit | Balance | ||
0 |
124Office supplies account | |||||
date | debit | credit | Balance | ||
0 |
640 Rent expense account | |||||
date | debit | credit | Balance | ||
0 |
612 | |||||
date | debit | credit | Balance | ||
0 |
168 | |||||
date | debit | credit | Balance | ||
0 |
106 | |||||
date | debit | credit | Balance | ||
0 |
901 income summary | |||||
date | debit | credit | Balance | ||
0 |
Explanation of Solution
Explanation:
All ledger account has been opened with the nil balance in balance column format i.e. first column is for date , second column is for debit and third is for credit column and final column is for balance column.
Requirement 1:
To determine:
We have to determine the journal entry and post them to the ledger account.
Requirement 1:

Answer to Problem 1APSA
Solution:
DATE | Journal titles | Debit($) | Credit($) |
April 01 | Cash | 30,000 | |
Computer equipment | 20,000 | ||
j. Nozomi capital | 50,000 | ||
(to record investment in cash and equipment) | |||
April 02 | Rent expense | 1800 | |
cash | 1800 | ||
( to record rent payment) | |||
April 03 | Office supplies | 1000 | |
Cash | 1000 | ||
( to record purchase of office supplies) | |||
April 10 | Prepaid insurance | 2400 | |
cash | 2400 | ||
( to record insurance paid) | |||
April 14 | cash | 8000 | |
Commission earned | 8000 | ||
( to record commission earned) | |||
April 28 | Salaries expense | 1600 | |
Cash | 1600 | ||
( to record salary expense) | |||
April 29 | Repair expense | 350 | |
cash | 350 | ||
( to record expense of repair) | |||
April 30 | Telephone expense | 750 | |
cash | 750 | ||
( to record telephone expense) | |||
April 30 | J. Nozomi capital | 1500 | |
cash | 1500 | ||
( to record withdrawal of cash for personal use) |
Ledger accounts
Cash account | |||||
date | debit | credit | Balance | ||
April 01 | 30,000 | 30,000 | |||
April 02 | 1800 | 28,200 | |||
April 03 | 1000 | 27,200 | |||
April 10 | 2400 | 24,800 | |||
April 14 | 1600 | 23,200 | |||
April 24 | 8000 | 31,200 | |||
April 28 | 1600 | 29,600 | |||
April 29 | 350 | 29,250 | |||
April 30 | 750 | 28,500 | |||
April 30 | 1500 | 27,000 |
Capital account | |||||
Date | debit | credit | Balance | ||
April 1 | 50,000 | 50,000 |
Computer account | |||||
date | debit | credit | Balance | ||
April 1 | 20,000 | 20,000 |
Telephone expense account | |||||
date | debit | credit | Balance | ||
April 30 | 750 | 750 |
Repair expense account | |||||
date | debit | credit | Balance | ||
April 29 | 350 | 350 |
Salaries expense account | |||||
date | debit | credit | Balance | ||
April 14 | 1600 | 1600 | |||
April 28 | 1600 | 3200 |
Commission earned account | |||||
date | debit | credit | Balance | ||
April 24 | 8000 | 8000 |
Prepaid insurance account | |||||
date | debit | credit | Balance | ||
April 10 | 2400 | 2400 |
Office supplies account | |||||
date | debit | credit | Balance | ||
April 3 | 1000 | 1000 |
Rent expense account | |||||
date | debit | credit | Balance | ||
April 2 | 1800 | 1800 |
Explanation of Solution
Explanation:
- In the given case, cash account and computer equipment account will be debited and capital account will be credited.
- In the given case, rent expense account will be debited and cash account will be credited.
- When office supplies is purchased then office supplies account will be debited and cash account will be credited.
- In this case, prepaid insurance account will be debited and cash account will be credited.
- In this case, salaries expense account will be debited and cash account will be credited.
- When commission is earned then cash account will be debited and commission account will be credited.
- When repair and telephone expense is incurred then repair account and telephone expense account will be debited and cash account will be credited.
- Hen cash is withdrew then withdrawal account will be debited and cash account will be credited.
Requirement 3:
To determine:
We have to determine the unadjusted trial balance.
Requirement 3:

Answer to Problem 1APSA
Solution:
J. Nozomi Travel April 30, 2013 | ||||
Account title | Debit($) | Credit($) | ||
101: cash | 27000 | |||
106: accounts receivable | 0 | |||
124: office supplies | 1,000 | |||
128: prepaid insurance | 2,400 | |||
167: computer equipment | 20,000 | |||
168: accumulated depreciation- computer equipment | 0 | |||
209: salaries payable | 0 | |||
301: j. nozomi capital | 50,000 | |||
302: J. nozomi withdrawals | 1,500 | |||
405: commission earned | 8,000 | |||
612: depreciation expense-computer equipment | 0 | |||
622: salaries expense | 3,200 | |||
637:insurance expense | 0 | |||
640: rent expense | 1,800 | |||
650:office supplies expense | 0 | |||
684: repair expense | 350 | |||
688: telephone expense | 750 | |||
Total | $58,000 | $ 58,000 |
Explanation of Solution
Explanation:
Cash account | |||||
date | debit | credit | Balance | ||
April 01 | 30,000 | 30,000 | |||
April 02 | 1800 | 28,200 | |||
April 03 | 1000 | 27,200 | |||
April 10 | 2400 | 24,800 | |||
April 14 | 1600 | 23,200 | |||
April 24 | 8000 | 31,200 | |||
April 28 | 1600 | 29,600 | |||
April 29 | 350 | 29,250 | |||
April 30 | 750 | 28,500 | |||
April 30 | 1500 | 27,000 |
Capital account | |||||
Date | debit | credit | Balance | ||
April 1 | 50,000 | 50,000 |
Computer account | |||||
date | debit | credit | Balance | ||
April 1 | 20,000 | 20,000 |
Telephone expense account | |||||
date | debit | credit | Balance | ||
April 30 | 750 | 750 |
Repair expense account | |||||
date | debit | credit | Balance | ||
April 29 | 350 | 350 |
Salaries expense account | |||||
date | debit | credit | Balance | ||
April 14 | 1600 | 1600 | |||
April 28 | 1600 | 3200 |
Commission earned account | |||||
date | debit | credit | Balance | ||
April 24 | 8000 | 8000 |
Prepaid insurance account | |||||
date | debit | credit | Balance | ||
April 10 | 2400 | 2400 |
Requirement 4:
To determine:
We have to determine the
Requirement 4:

Answer to Problem 1APSA
Solution:
DATE | Journal titles | Debit($) | Credit($) |
a. | Insurance expense | 133 | |
Prepaid insurance | 133 | ||
( to record prepaid insurance) | |||
b. | Office supplies expense | 400 | |
Office supplies | 400 | ||
( to record office supply still available) | |||
c. | Depreciation expense-computer equipment | 500 | |
Accumulated depreciation- computer equipment | 500 | ||
( to record depreciation) | |||
d. | Salaries expense | 420 | |
Salaries payable | 420 | ||
( to record unrecorded salary) | |||
e. | Accounts receivable | 1,750 | |
Commission earned | 1,750 | ||
( to record commission earned) |
Explanation of Solution
Explanation:
- In the given case, insurance expense account will be debited and prepaid insurance account will be credited.
- In this case, office supplies expenses account will be debited and office supplies will be credited.
- When depreciation is to be provided then depreciation expense account will be debited and accumulated depreciation account will be credited.
- In this case, salaries expense account will be debited and salaries payable account will be credited.
- In the given case, accounts receivable account will be debited and commission earned account will be credited.
Requirement 5:
To determine:
We have to determine the adjusted trial balance, income statement and balance sheet.
Requirement 5:

Answer to Problem 1APSA
Solution:
J. Nozomi Travel April 30, 2013 | ||||
Account title | Debit($) | Credit($) | ||
101: cash | 27000 | |||
106: accounts receivable | 1750 | |||
124: office supplies | 600 | |||
128: prepaid insurance | 2,267 | |||
167: computer equipment | 20,000 | |||
168: accumulated depreciation- computer equipment | 500 | |||
209: salaries payable | 420 | |||
301: j. nozomi capital | 50,000 | |||
302: J. nozomi withdrawals | 1,500 | |||
405: commission earned | 9750 | |||
612: depreciation expense-computer equipment | 500 | |||
622: salaries expense | 3,620 | |||
637:insurance expense | 133 | |||
640: rent expense | 1,800 | |||
650:office supplies expense | 400 | |||
684: repair expense | 350 | |||
688: telephone expense | 750 | |||
Total | $60,670 | $ 60,670 |
J. Nozomi Travel For month ended April 30, 2013 | |||||
Account title | amount($) | amount($) | |||
Revenues: | |||||
Commission earned | 9750 | ||||
Expenses: | |||||
Depreciation expense- computer equipment | 500 | ||||
Salaries expense | 3620 | ||||
Insurance expense | 133 | ||||
Rent expense | 1,800 | ||||
Office supplies expense | 400 | ||||
Telephone expenses | 750 | ||||
Repair expense | 350 | ||||
Total expenses | 7553 | ||||
Net income | $2,197 |
J. Nozomi Travel April 30, 2013 | |||||
amount($) | amount($) | ||||
Assets: | |||||
Cash | 27,000 | ||||
Accounts receivable | 1,750 | ||||
Office supplies | 600 | ||||
Prepaid insurance | 2,267 | ||||
Computer equipment | 20,000 | ||||
Accumulated depreciation | 500 | 19,500 | |||
Total assets | 51,117 | ||||
Liabilities | |||||
Salaries payable | 420 | ||||
Equity | |||||
J. Nozomi capital | 50,697 | ||||
Total liabilities and equity | $51,117 |
Explanation of Solution
Explanation:
Cash account | |||||
Date | Debit | Credit | Balance | ||
April 1 | 30,000 | 30,000 | |||
April 2 | 1800 | 28,200 | |||
April 3 | 1000 | 27,200 | |||
April 10 | 2,400 | 24,800 | |||
April 14 | 1600 | 23,200 | |||
April 24 | 8,000 | 31,200 | |||
April 28 | 1600 | 29,600 | |||
April 29 | 350 | 29,250 | |||
April 30 | 750 | 28,500 | |||
April 30 | 1500 | 27,000 |
Capital account | |||||
Date | Debit | Credit | Balance | ||
April 1 | 50,000 | 50,000 |
Computer account | |||||
Date | Debit | Credit | Balance | ||
April 1 | 20,000 | 20,000 |
Telephone expense account | |||||
Date | Debit | Credit | Balance | ||
April 30 | 750 | 750 |
Repair expense account | |||||
date | debit | Credit | Balance | ||
April 29 | 350 | 350 |
Salaries expense account | |||||
date | debit | Credit | Balance | ||
April 14 | 1600 | 1600 | |||
April 28 | 1600 | 3200 | |||
April 30 | 420 | 3620 |
Commission earned account | |||||
date | debit | Credit | Balance | ||
April 24 | 8000 | 8000 | |||
April 30 | 1750 | 9750 |
insurance account | |||||
date | debit | credit | balance | ||
April 30 | 133 | 133 |
Office supplies account | |||||
date | debit | credit | balance | ||
April 30 | 400 | 400 |
Rent expense account | |||||
date | debit | credit | balance | ||
April 2 | 1800 | 1800 |
Requirement 6:
To determine:
We have to determine the journal entries to close the temporary accounts.
Requirement 6:

Explanation of Solution
Explanation:
DATE | Journal titles | Debit($) | Credit($) |
April 30 | Commission earned | 9750 | |
Income summary | 9750 | ||
( to record closing entry) | |||
April 30 | Income summary | 7,553 | |
Depreciation expense | 500 | ||
Salaries expense | 3620 | ||
Insurance expense | 133 | ||
Rent expense | 1,800 | ||
Office supplies expense | 400 | ||
Repair expense | 350 | ||
Telephone expense | 750 | ||
( to record closing expenses) | |||
April 30 | Income summary | 2,197 | |
j. nozomi capital | 2,197 | ||
( to record closing capital) | |||
April 30 | j. nozomi capital | 1500 | |
j.nozomi withdrawals | 1500 | ||
( to record closing withdrawal) |
Ledger accounts
Cash account | |||||
Date | Debit | credit | Balance | ||
April 1 | 30,000 | 30,000 | |||
April 2 | 1800 | 28,200 | |||
April 3 | 1000 | 27,200 | |||
April 10 | 2,400 | 24,800 | |||
April 14 | 1600 | 23,200 | |||
April 24 | 8,000 | 31,200 | |||
April 28 | 1600 | 29,600 | |||
April 29 | 350 | 29,250 | |||
April 30 | 750 | 28,500 | |||
April 30 | 1500 | 27,000 |
Capital account | |||||
Date | Debit | credit | Balance | ||
April 1 | 50,000 | 50,000 | |||
April 30 | 2197 | 52197 | |||
April 30 | 1500 | 50,697 |
Computer account | |||||
Date | Debit | credit | Balance | ||
April 1 | 20,000 | 20,000 |
Telephone expense account | |||||
Date | Debit | credit | Balance | ||
April 30 | 750 | 750 | |||
April 30 | 750 | 0 |
Repair expense account | |||||
date | debit | credit | Balance | ||
April 29 | 350 | 350 | |||
April 30 | 350 | 0 |
Salaries expense account | |||||
date | debit | credit | Balance | ||
April 14 | 1600 | 1600 | |||
April 28 | 1600 | 3200 | |||
April 30 | 420 | 3620 | |||
April 30 | 3620 | 0 |
Commission earned account | |||||
date | debit | credit | Balance | ||
April 24 | 8000 | 8000 | |||
April 30 | 1750 | 9750 | |||
April 30 | 9750 | 0 |
insurance account | |||||
date | debit | credit | balance | ||
April 30 | 133 | 133 | |||
April 30 | 133 | 0 |
Office supplies account | |||||
date | debit | credit | balance | ||
April 30 | 400 | 400 | |||
April 30 | 400 | 0 |
Rent expense account | |||||
date | debit | credit | balance | ||
April 2 | 1800 | ||||
April 30 | 1800 | 0 |
Income summary account | |||||
date | debit | credit | balance | ||
April 30 | 9750 | 9750 | |||
April 30 | 7,553 | 2197 | |||
April 30 | 2197 | 0 |
Requirement 7:
To determine:
We have to determine the post closing trial balance.
Requirement 7:

Answer to Problem 1APSA
Solution:
J. Nozomi Travel April 30, 2013 | |||||
Account title | Debit($) | Credit($) | |||
101: cash | 27000 | ||||
106: accounts receivable | 1750 | ||||
124: office supplies | 600 | ||||
128: prepaid insurance | 2,267 | ||||
167: computer equipment | 20,000 | ||||
168: accumulated depreciation- computer equipment | 500 | ||||
209: salaries payable | 420 | ||||
301: j. nozomi capital | 50,697 | ||||
Total | $51617 | $ 51,617 |
Explanation of Solution
Explanation:
Cash account | |||||
Date | Debit | credit | Balance | ||
April 1 | 30,000 | 30,000 | |||
April 2 | 1800 | 28,200 | |||
April 3 | 1000 | 27,200 | |||
April 10 | 2,400 | 24,800 | |||
April 14 | 1600 | 23,200 | |||
April 24 | 8,000 | 31,200 | |||
April 28 | 1600 | 29,600 | |||
April 29 | 350 | 29,250 | |||
April 30 | 750 | 28,500 | |||
April 30 | 1500 | 27,000 |
Capital account | |||||
Date | Debit | credit | Balance | ||
April 1 | 50,000 | 50,000 | |||
April 30 | 2197 | 52197 | |||
April 30 | 1500 | 50,697 |
Computer account | |||||
Date | Debit | credit | Balance | ||
April 1 | 20,000 | 20,000 |
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