On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel

Problem 4-2A Applying The Accounting Cycle

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.
2 Rented furnished office space by paying $1,700 cash for the first month’s (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 $1,800 cash for two weeks’ salaries earned by employees.
24 Collected $7,900 cash on commissions from airlines 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 Stafford withdrew $1,500 cash for personal use.

The company’s chart of accounts follows:

Required
1. Use the balance column format to set up each ledger account listed in its chart of accounts.
2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items 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 owner’s equity for the month of April and the balance sheet at April 30, 2005.
6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing trial balance.

Check (3) Unadj. trial balance totals, $67,900
(4a) Dr. Insurance Expense, $200
(5) Net income, $1,830; Capital (4/30/2005), $60,330; Total assets, $60,650
(7) P-C trial balance totals, $61,250

Click here for the solution: On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel

Billy has created a device called a TowRack which is a rack for carrying sports equipment such as bikes, skis, and kayaks

Billy has created a device called a TowRack which is a rack for carrying sports equipment such as bikes, skis, and kayaks. What makes this item different from other racks is that it attaches to a vehicle's trailer hitch and has a single wheel to help support the weight of the rack and items attached to it. Because it is so much lighter than a regular trailer, it can be used on even the smallest of cars that are not designed to tow regular trailers. Because of the success of this product, competitors introduce similar products. But because of the initial success of Billy's TowRack, all of these similar products are often referred to as TowRacks. Billy has also written a book about using "TowRacks" and safe driving techniques for driving with TowRacks and would like to obtain a copyright for the book. Discuss Billy's legal situation, including patent, trademark and copyright issues.

Click here for the solution: Billy has created a device called a TowRack which is a rack for carrying sports equipment such as bikes, skis, and kayaks