Question

Required information [The following information applies to the questions displayed below.] On January 1, 2021, Red Flash Photography had the following balances: Cash, $20,000; Supplies, $8,800; Land, $68,000; Deferred Revenue, $5,800; Common Stock $58,000; and Retained Earnings, $33,000. During 2021, the company had the following transactions: 1. February 15 Issue additional shares of common stock, $28,000. 2. May 20 Provide services to customers for cash, $43,000, and on account, $38,000. 3. August 31 Pay salaries to employees for work in 2021, $31,000. 4. October 1 Purchase rental space for one year, $20,000. 5. November 17 Purchase supplies on account, $30,000. 6. December 30 Pay dividends, $2,800. The following information is available on December 31, 2021: 1. Employees are owed an additional $4,800 in salaries. 2. Three months of the rental space has expired. 3. Supplies of $5,800 remain on hand. 4. All of the services associated with the beginning deferred revenue have been performed. 5. Prepare closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Credit $48,800 Income Statement Service Revenue $ 48,800 Less: Expenses Salaries Expenses $ 35,800 31000+4800 Rent Expenses $ 5,000 20000*3/12 Supplies Expense $ 33,000 8800+30000-5800 Net Income (Loss) $ -25,000 Date Accounts Title Debit Dec-31 Service Revenue $ 48,800 Income Summary Dec-31 Income Summary $ 73,800 Salaries Expenses Rent Expenses Supplies Expense Dec-31 Retained Earnings $ 25,000 Income Summary Dec-31 Retained Earnings $ 2,800 Dividend $35,800 $ 5,000 $33,000 $ 25,000 $ 2,800