Smallville Company was organized on January 1, 2020. It is authorized to issue 114000 shares of $120 par value common stock. At the beginning of April, the ledger of Smallville Company carried the following balances to their respective accounts. Cash-$58000, Merchandise Inventory- $75500, Prepaid Insurance-$4900, 10% Notes Payable-$26000, Equipment-$138000, Accumulated Depreciation: Equipment-$3100, Common Stock-$124000, Paid in capital in excess of par value: Common Stock-$23000, and Retained Earnings-$100300.

The following transactions took place in Smallville Company during April of the current year (2020).

April 1 - Issued 2400 new shares of common stock for $335000 April 3 - Purchased merchandise of $7500 on account from Prescott Co., terms FOB destination, 2/10, n/30. The appropriate party paid the freight charge of $260. April 4 - Sold merchandise for cash, $85700. The cost of the merchandise sold was $48000. April 5 - Purchased merchandise on account from Stafford Co., $21000, terms FOB shipping point, 2/10, n/30. The appropriate paid the freight charge of $630. April 6 - Returned $550 of merchandise purchased on April 3 from Prescott Co. April 13 - Paid Prescott Co. on account for purchase of April 3. April 15 - Paid Stafford Co. on account for purchase of April 5. April 17 - Purchased merchandise for cash $1500. April 20 - Received refund for poor quality merchandise from supplier on cash purchase $190.

Additional Information on Smallville Company: A review of the ledger of Smallville Company at April 30, 2020, produces the following data pertaining to the preparation of monthly adjusting entries. (a) Notes Payable $26000. This balance consists of a note for 6 months at an annual interest rate of 15%, dated January 1, 2020. (b) There are five workers in Smallville Company who are paid wages weekly. The five workers are paid $840 each for a 5-day work week (Monday to Friday). April 30 is a Tuesday and workers are paid on Fridays. (c) Annual depreciation is $12200 on equipment. (d) Physical check reveals inventory actually on hand on April 30, 2020 is $54331.0. (1) Journalize the adjusting entries on April 30, 2020. (2) Prepare an adjusted trial balance. (3) Using the balances from the adjusted trial balance, prepare a multi-step income statement and owners equity statement for the one month ended April 30. (Assume that the company falls under the 40% tax bracket).