Question

  
On January 1, 2021, Red Flash Photography had the following balances: Cash, $16,000; Supplies, $8,400; Land, $64,000; Deferred Revenue, $5,400; Common Stock $54,000; and Retained Earnings, $29,000. During 2021, the company had the following transactions:

1.		February		15		Issue additional shares of common stock, $24,000.
2.		May		20		Provide services to customers for cash, $39,000, and on account, $34,000.
3.		August		31		Pay salaries to employees for work in 2021, $27,000.
4.		October		1		Purchase rental space for one year, $16,000.
5.		November		17		Purchase supplies on account, $26,000.
6.		December		30		Pay dividends, $2,400.

The following information is available on December 31, 2021:

1. Employees are owed an additional $4,400 in salaries.
2. Three months of the rental space has expired.
3. Supplies of $5,400 remain on hand.
4. All of the services associated with the beginning deferred revenue have been performed.

Answer 1

Credit Debit 24,000 24000 39,000 34,000 73,000 Red Flash Photography General Journal Entries For the Month Ended January 31.2015 Date Title Account and Description 1 Cash Common Stock To record shares issued. 2 Cash Account Receivable Service Revenue To record service provided 3 Salaries expense Cash To record salaries payment 4 Prepaid rent Cash To record one year preapid rent 5 Supplies Account Payable To record supplies purcahsed on account 6 Dividends Cash To record dividends paid 27,000 27,000 16,000 16,000 26,000 26,000 2,400 2,400 Credit Debit 4,400 4400 Red Flash Photography Adjusting entries For the Month Ended January 31,2015 Date Title Account and Description 1 Salaries expense Salaries Payable To record accrued salaries 2 Rent expense Preapid Rent To adjust rent expired 3 Supplies expense Supplies To record supplies expense 4 Unearned revenue Service revenue To adjust revenue earned 4,000 4,000 29,000 29,000 5,400 5,400 Credit Debit 78,400 78,400 64,400 Red Flash Photography Closing Entries For the Period Ended December 31,2015 Date Title Account and Description 1 Service Revnue Income summary To close revenue account 2 Income Summary Rent Expense Salaries Expense Supplies Expense To close expense accounts 3 Income Summary Retained Earning To adjust net income to R/E 4 Retained Earnings Dividends To adjust dividends to R/E 4,000 31,400 29,000 14,000 14,000 2,400 2000

Cash Transaction Debit Credit Beginning balance Common Stock Service Revenue Salaries expense Dividends Preapid rent 24,000 39,000 Balance Debit Credit 16,000 40,000 79,000 52,000 49,600 33,600 27,000 2,400 16,000 Unearned Revnue Transaction Debit Credit Balance Debit Credit 5,400 Beginning balance Retained Earnings Transaction Debit Credit Balance Debit Credit 29,000 Beginning balance

Land Transaction Debit Credit Balance Debit | Credit 64,000 Beginning balance Common Stock Transaction Debit Credit Balance Debit | Credit 54,000 78,000 Beginning balance Cash 24000 Supplies Transaction Debit Credit Balance Debit Credit 8,400 34,400 Beginning balance Account Payable 26,000

Account Recievable Transaction Credit Debit 34,000 Balance Debit Credit 34,000 Service revenue Preapid Rent Transaction Debit Credit / 16,000 Balance Debit | Credit 16,000 Cash Account Payable Transaction Debit Credit 26,000 Balance Debit Credit 26,000 Supplies

Dividends Transaction Debit Credit Credit 2,400 Balance Debit Credit 2,400 Cash Salaries Expense Transaction Debit Credit 27,000 Balance Debit Credit 27,000 Cash Service Revenue Transaction Balance Debit Credit | Debit Credit 39,000 39,000 34,000 73,000 Cash Account receivable

Red Flash Photography Trial Balance For the Month Ended January 31, 2015 Credit Debit 33,600 34,000 34,400 16,000 Cash Account Receivable Supplies Preapid Rent Account Pyabale Common Stock Service Revenue Unearned Revenue Retained Earnings Dividends Salaries Expense Land 26,000 78,000 73,000 5,400 29,000 2,400 27,000 64,000 211,400 211,400 Credit Red Flash Photography Adjusted Trail Balance For the Month Ended December 31, 2015 Debit 33,600 34,000 5,400 12,000 26,000 78,000 78,400 Cash Account Receivable Supplies Prepaid Rent Account Pyabale Common Stock Service Revenue Rent Expense Retained Earnings Dividends Salaries Expense Land Supplies expense Salaries Payable Total 4,000 29,000 2,400 31,400 64,000 29,000 | 215,800 4,400 215,800|

78,400 Red Flash Photography Income Statement For the Period Ended December 31, 2015 Service revenue Less: Expenses Rent Expense 4,000 Salaries Expense 31,400 Supplies Expense 29,000 Total Expenses Net Income 64,400 14,000 Red Flash D Red Flash Photography Statement of Retained Earnings For the Period Ended December 31,2015 Beginning balance Jan 1, 2015 Add Net Income 29,000 14,000 43,000 2,400 40,600 Less Dividends Ending Balance dec 31,2015 ol Balance at January 1 Additions Net income Dividends Balance at dec 31 Common stock Retained earnings 54000 29000 24000 14,000 2,400 78000 40600 Total stockholders equity | 83000 24000 14000 2400 118600

Balance sheet Liabilities and Equity Current Liabilities 33,600 Account payable 34,000 Salaries Payable 5,400 Total Current Liabilities 12,000 Equity 85,000 Common Stock Retained Earnings 64,000 Total Equity 149,000 Total Liabilities and Equity Assets Current Assets Cash Account Receivable Supplies Prepaid Rent Total Current Assets Long term Assets Land Total Assets 26,000 4,400 30,400 78,000 40,600 118,600 149,000