Question

Ronnie Redd is a photographer who has started a new photography business. On December 1, 2018, Ronnie decided to incorporate under the name Abington Campus Photography. Ronnie has hired you to provide accounting services for the company. Read the instructions at the top of each tab. Prepare the required journal entries for the month of December, the necessary adjusting entries and closing entries as of December 31, and a complete set of financial statements, to include all proper labels.

1. On December 1, Abington Campus Photography issued 10,000 shares of common stock to Ronnie Redd in exchange for $42,000 cash.
2. On December 1, Abington Campus Photography purchased photography equipment for $11,160 cash.
3. On December 1, Abington Campus Photography prepaid $2,500 for the first 2 month's rent for their photography studio. The company's policy is to initially record prepaid expenses and unearned revenues in balance sheet accounts.
4. On December 4, Abington Campus Photography received a $3,200 deposit (partial payment) from Kim Jong and Vince Molinari for their June wedding. The company's policy is to initially record prepaid expenses and unearned revenues in balance sheet accounts.
5. On December 9, Abington Campus Photography received $2,880 cash for full payment in advance from Edward Taylor for a late December photo shoot.
6. On December 12, Abington Campus Photography purchased $1,960 of photography supplies on account.
7. On December 15, Abington Campus Photography performed photography services for a local church and billed the client $12,800.
8. On December 18, Abington Campus Photography received its electric bill (utilities) in the amount of $1,960. Payment is due on January 18.
9. On December 28, Abington Campus Photography paid $800 on account.
10. On December 30, Abington Campus Photography paid $1,200 in staff assistant's salary for December.
11. On December 30, Abington Campus Photography paid a $1,500 cash dividend.
12. Information for adjusting entries: The photography equipment purchased on December 1 has an estimated useful of of 3 years and no residual value. Prepare the adjusting entry to record depreciation for the month of December.
13. Prepare the adjusting entry required for rent expired during December.
14. Prepare the adjusting entry to record revenue earned from the photo shoot for Edward Taylor. Taylor paid $2,880 in advance on December 9, and the service was completed late in December.
15. A physical count of photography supplies indicate that $390 of supplies are on hand as of December 31. Prepare the required adjusting entry, if any.
16. Prepare the entry to close the revenue account(s) to Income summary.
17. Prepare the entry to close the expense account(s) to Income summary.
18. Prepare the entry to close income summary. Prepare the entry to close the dividends account.
19. Prepare the entry to close the dividends account.

Answer 1