Reference no: EM132620743
Question - For the past several years, M. Adam has operated a part-time business from his home. As of April 1, 2020, Adam decided to move to rented quarters and to operate the business, which was to be known as Adam & Family Inc., on a full-time basis. Adam & Family entered into the following transactions during April:
April 4. The following assets were received from John Addams: cash, Rs.1, 500,000; accounts receivable, Rs.225,000; supplies, Rs.187,500; and office equipment, Rs.1,125,000. There were no liabilities received.
April 4. Paid three months' rent on a lease rental contract, Rs. 675,000.
April 4. Paid the premium on property insurance policy for the year, Rs. 270,000.
April 6. Received cash from clients as an advance payment for services to be providers. 450,000.
April 7 Purchased additional office furniture on account from Morrilton Company, Rs. 270,000.
April 8. Received cash from clients on account, Rs. 120,000. April 11. Paid cash for newspaper advertisement, Rs. 18,000. April 12. Paid Morrilton Company Rs. 120,000 for debt incurred on April 7.
April 15. Recorded services provided on account for the period April 4-15, Rs. 337,500
April 15. Paid part-time receptionist for two weeks salary, Rs. 60,000.
April 15. Recorded cash from cash clients for fees earned April 4-15. Rs. 476,250.
April 18. Paid cash for supplies, Rs.112,500.
April 22. Recorded services provided on account for April 18-22, Rs. 165,000.
April 22. Recorded cash from cash clients for fees earned April 18-22, Rs. 277,500.
April 25. Received cash from clients on account, Rs. 240,000.
April 27. Paid part-time receptionist for two week's salary, Rs. 60,000.
April 28. Paid telephone bill for April, Rs. 19,500.
April 29. Paid electric bill for April, Rs. 30,000.
April 29. Recorded cash from cash clients for fees earned April 25-29. Rs. 307,500.
April 29. Recorded services provided on account for April 25-29, Rs. 150,000.
April 29. Adam received Rs. 675,000 from the company as his salary.
Required -
1. Record the transactions stated above in good general journal form.
2. Post the transactions to T-accounts.
3. Record and post the following adjustments:
a. Insurance expired in April, Rs. 22,500.
b. Supplies on hand April 29, Rs. 153,000.
c. Depreciation for the office equipment in April, Rs. 75,000. d. Accrued receptionist salary on April 30, Rs. 3000.
e. Rent expired in April, Rs. 225,000.
f. Earned Rs. 300,000 of services that were previously paid for on 4/6.
5. Prepare an Income Statement, Statement of Retained Earnings and Balance Sheet.
6. Record and post closing entries.
7. Prepare a post-closing trial balance.