For the past several years, Adam Levine, a American well-known singer, 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 Maroon Inc. specializing in merchandising. Maroon entered into the following transactions during April:

April 4 The following assets were received from Adam Levine and there were no liabilities received:

April

April $1,800.

April 5 Purchased 200 units of inventory for $4,000 terms 2/10 net 30.

April 6 Received cash from customers as an advance payment for orders to be delivered $3,000. April 7 Purchased additional office furniture on account from Morrilton Company $1,800. April 8 Received cash from customers on account, $800.

April 9 Sold 40 units of inventory on account for $4,000.

April 10 Paid for the inventory purchased on April 5.

April 11 Paid cash for newspaper advertisement $120.

April 12 Paid Morrilton Company $800 for debt incurred on April 7.

April 15 Sold 45 units of inventory for $2,250 in cash

April 15 Paid part-time staff for two weeks salary, $400.

April 22 Sold 59 units of inventory for $2,950 and received cash of $1,850 immediately. The remaining will be paid later.

Cash $10,000

Accounts Receivables $1,500 Inventory $1,250

Office Equipment $7,500

4 Paid three months rent in advance on a lease rental contract $4,500.

4 Paid in advance the premium on property and casualty insurance policies for the year

April 25 Received cash from customer on account, $1,600. April 27 Paid part-time staff for two weeks salary, $400. April 28 Paid telephone bill for April, $200.

April 29 Paid utilities bill for April, $130.

April 29 Recorded cash from cash customer for revenue of $2,050 from selling 41 units. April 29 Received cash on account from customer, $1,000

April 29 Paid the executives salary of $4,500

April 30 Adam withdrawn $2,000 for his own liveshow.

Note: Maroon Inc. uses a perpetual inventory system (FIFO with a cost flow method). A record stated that beginning inventory on 4 April should be 50 units.

Requirements:

1) Journalize and post normal monthly transactions stated above to general ledger accounts in T accounts.

2) Prepare the trial balance (Hint: Assets first in order of liquidity)

3) Journalize and post the following adjustments (adjusting entries) in the same T accounts in

requirement #1 above:

a. Insurance expired in April, $150.

b. Depreciation for the office equipment in April $500.

c. Accrued staff salary on April 30, $20.

d. Rent expired in April, $1,500.

e. Unearned revenue of $2,000 was earned during the month (April 6)

f. Allowance for doubtful accounts is 5% of the remaining payments of the customer

at the transaction on April 22.

4) Prepare adjusted trial balance.

5) Generate an Income Statement, Statement of Owners Equity and Classified Balance Sheet. 6) Journalize and post closing entries in the same T accounts in requirement #1 above.

7) Prepare a post closing trial balance.