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. 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. solution for the general entries are in the picture try to zoom it out following are the  adjustments Insurance expired in April, Rs. 22,500. Supplies on hand April 29, Rs. 153,000. Depreciation for the office equipment in April, Rs. 75,000. Accrued receptionist salary on April 30, Rs. 3000. Rent expired in April, Rs. 225,000. Earned Rs. 300,000 of services that were previously paid for on 4/6. solution for the adjusted entries are in the picture now prepare proper income statement and statement of retained earning

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.

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.

solution for the general entries are in the picture try to zoom it out

following are the  adjustments

  1. Insurance expired in April, Rs. 22,500.
  2. Supplies on hand April 29, Rs. 153,000.
  3. Depreciation for the office equipment in April, Rs. 75,000.
  4. Accrued receptionist salary on April 30, Rs. 3000.
  5. Rent expired in April, Rs. 225,000.
  6. Earned Rs. 300,000 of services that were previously paid for on 4/6.

solution for the adjusted entries are in the picture

now prepare proper income statement and statement of retained earning

 

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