16-A2 Analysis of Transactions, Preparation of Statements The Nagarajan Company was incorporated on April 1. Nagarajan had 10 holders of common stock. Ramesh Nagarajan, who was the president and chief executive officer, held 51% of the shares. The company rented space in chain discount stores and specialized in selling ladies' shoes. Nagarajan's first location was a store in Import Market Centers, Inc. The following events occurred during April: 1. The company was incorporated. Common stockholders invested $100,000 cash. 2. Purchased merchandise inventory for cash, $35,000. 3. Purchased merchandise inventory on open account, $25,000. 4. Merchandise carried in inventory at a cost of $37,000 was sold for cash for $25,000 and on open account for $65,000, a grand total of $90,000. Nagarajan carries and collects these accounts receivable. 5. Collection of the above accounts receivable, $15,000. 6. Payments of accounts payable, $18,000. 7. Special display equipment and fixtures were acquired on April 1 for $36,000. Their expected useful life was 36 months with no terminal scrap value. Straight-line depreciation was adopted. This equipment was removable. Nagarajan paid $12,000 as a down payment and signed a promissory note for $24,000. 8. On April 1, Nagarajan signed a rental agreement with Import Market Centers. The agree- ment called for a flat $2,000 per month, payable quarterly in advance. Therefore, Nagarajan paid $6,000 cash on April 1. 9. The rental agreement also called for a payment of 10% of all sales. This payment was in addition to the flat $2.000 per month. In this way. Import Market Centers would share in any success of the venture and be compensated for general services such as cleaning and utilities. This payment was to be made in cash on the last day of each month as soon as the sales for the month were tabulated. Therefore, Nagarajan made the payment on April 30. 10. Wages, salaries, and sales commissions were all paid in cash for all earnings by employees. The amount was $40,000. 11. Depreciation expense was recognized. 12. The expiration of an appropriate amount of prepaid rental services was recognized. 1. Total assets on April 30, excluding the adjusting entries are Submit Answer Tries 0/5 2. Total assets on April 30, including the adjusting entries are Submit Answer Tries 0/5 3. Profit in April, excluding the adjustments are Submit Answer Tries 0/5 4. Profit in April, including the adjustments are