Question

On January 1, 2021, Red Flash Photography had the following balances: Cash, $31,000; Supplies, $9,900; Land, $79,000; Deferred Revenue, $6,900; Common Stock $69,000; and Retained Earnings, $44,000. During 2021, the company had the following transactions:

1.		February		15		Issue additional shares of common stock, $39,000.
2.		May		20		Provide services to customers for cash, $54,000, and on account, $49,000.
3.		August		31		Pay salaries to employees for work in 2021, $42,000.
4.		October		1		Paid for one year's rent in advance, $31,000.
5.		November		17		Purchase supplies on account, $41,000.
6.		December		30		Pay dividends, $3,900.

The following information is available on December 31, 2021:

1. Employees are owed an additional $5,900 in salaries.
2. Three months of the rental space has expired.
3. Supplies of $6,900 remain on hand.
4. All of the services associated with the beginning deferred revenue have been performed

Requirement

General Journal

General Ledger

Trial Balance

Income Statement

Statement of SE

Balance Sheet

1. Record each of the transactions listed above in the 'General Journal' tab. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.

2. Record the adjusting entries in the 'General Journal' tab.

3. Review the adjusted 'Trial Balance' as of December 31, 2021.

4. Prepare an income statement for the year ended December 31, 2021, in the 'Income Statement' tab.

5. Prepare the statement of Stockholder's Equity for the year ended December 31, 2021, in the 'Income Statement' tab.

6. Prepare a classified balance sheet as of December 31, 2021 in the 'Balance Sheet' tab.

7. Record the closing entries in the 'General Journal' tab.

Answer 1

Date	Journal Entries	Dr. ($)	Cr. ($)
15/02/21	cash	39000
	To common stock		39000
	(issuance of common stock)
20/05/21	cash	54000
	accounts receivable	49000
	To services		103000
	(services provided)
31/08/21	salary expenses	42000
	To cash		42000
	(salaries paid)
01/10/21	prepaid rent	31000
	To cash		31000
	(prepaid rent paid)
17/11/21	supplies	41000
	To accounts payable		41000
	(supplies purchased on account)
30/12/21	dividends	3900
	To cash		3900
	(dividends paid)
	Adjusting Journal Entries	Dr. ($)	Cr. ($)
31/12/21	salary expenses	5900
	To salary payable		5900
	(salaries accrued)
31/12/21	rent expenses	7750
	To prepaid rent		7750
	(rent expired)
31/12/21	supplies expenses	44000
	To supplies		44000
	(supplies expensed)
31/12/21	deferred revenue	6900
	To services		6900
	(services recognized)

Trial Balance	unadjusted	adjustments	adjusted
accounts	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)
cash	31000		93000	76900	47100
accounts receivable			49000		49000
supplies	9900		41000	44000	6900
prepaid rent			31000	7750	23250
land	79000				79000
deferred revenue		6900	6900
accounts payable				41000		41000
salary payable				5900		5900
common stock		69000		39000		108000
retained earnings		44000				44000
dividends			3900		3900
services				109900		109900
supplies expenses			44000		44000
rent expenses			7750		7750
salary expenses			47900		47900
totals	119900	119900	324450	324450	308800	308800

Red Flash Photography
Statement of Stockholders Equity
For the period Dec 31, 2021
services	109900
expenses
supplies expenses	-44000
rent expenses	-7750
salary expenses	-47900
net income	10250
Red Flash Photography
Statement of Stockholders Equity
For the period Dec 31, 2021
common stock	108000
beginning retained earnings	44000
add: net income	10250
less: dividend	-3900
ending stockholders equity	158350

Red Flash Photography
Balance Sheet
As of Dec 31, 2021
assets
cash	47100
accounts receivable	49000
supplies	6900
prepaid rent	23250
total current assets		126250
land		79000
total assets		205250
liabilities and stockholders equity
accounts payable	41000
salary payable	5900
total liabilities		46900
stockholders equity
common stock	108000
retained earnings	50350
total stockholders equity		158350
total liabilities and stockholders equity		205250