On January 1, 2021, Red Flash Photography had the following balances: Cash, $14,000; Supplies,...

Question

On January 1, 2021, Red Flash Photography had the following balances: Cash, $14,000; Supplies, $8,200; Land, $62,000; Deferred Revenue, $5,200; Common Stock $52,000; and Retained Earnings, $27,000. During 2021, the company had the following transactions: 1. February 15 Issue additional shares of common stock, $22,000. 2. May 20 Provide services to customers for cash, $37,000, and on account, $32,000. 3. August 31 Pay salaries to employees for work in 2021, $25,000. 4. October 1 Paid for one year's rent in advance, $14,000. 5. November 17 Purchase supplies on account, $24,000. 6. December 30 Pay dividends, $2,200. The following information is available on December 31, 2021: 1. Employees are owed an additional $4,200 in salaries. 2. Three months of the rental space has expired. 3. Supplies of $5,200 remain on hand. 4. All of the services associated with the beginning deferred revenue have been performed.  Requirement General Journal  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.

Bhavani · Accepted Answer

Journal entries
		Journal  entries
	Date	Account Name and Explanation		Debit		Credit
	Feb-15	Cash  		$ 22,000
		      Common Stock  				$ 22,000
		(Additional  shares  issued  has  recorded)
	May-20	Cash 		$ 37,000
		Accounts  Receivable 		$ 32,000
		     Service  revenue 				$ 69,000
		(Service  done  for  cash  and  on  account  has  recorded)
	Aug-31	Salaries  expense 		$ 25,000
		   Cash 				$ 25,000
		(Salaries paid  has recoded)
	Oct-01	Prepaid  Rent		$ 14,000
		   Cash 				14000
		(Rent  paid in  advance  has  recorded)
	Nov-17	Supplies		24000
		   Accounts  payable 				24000
		(supplies  purchased  on  account  has  recorded)
	Dec-30	Dividend  		$ 2,200
		    Cash				$ 2,200
		(Dividend  paid  has recoded)
		Adjusting  entries
	Dec-31	Salaries  expense		$ 4,200
		    Salaries  payable 				$ 4,200
		(Salary  owed  has  recorded)
	Dec-31	Rent  expense		$ 3,500.00
		      Prepaid  rent  				$ 3,500.00
		(Used  portion  of  advance  rent  has  recorded as  rent  expense)
		(14000 * 3/12= $3500
	Dec-31	Supplies  Expense		$ 27,000
		        Supplies				$ 27,000
		(Used  portion  of  supplies  has  recorded as  supplies expense)
		$8200+$24000 -  $5200=  $27000
	Dec-31	Deferred  revenue 		$ 5,200
		    Service  revenue 				$ 5,200
		(Deferred  revenue  service  performed  has  recorded)
		  Closing  entries
	Dec-31	Service  revenue		$ 74,200
		   Income  Summary				$ 74,200
		(Revenue closed  to  Income  summary)
	Dec-31	Income  Summary		$ 59,700.00
		           Salary  expense				$ 29,200
		            Rent  expense				$ 3,500.00
		            Supplies  expense				$ 27,

On January 1, 2021, Red Flash Photography had the following balances: Cash, $14,000; Supplies, $8,200; Land, $62,000; Deferred Revenue, $5,200; Common Stock $52,000; and Retained Earnings, $27,000....

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