Question

General Journal, Income Statement, Statement of SE, Balance Sheet

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.

Answer 1

Journal Entries
Date	Particulars			Debit	Credit
15-Feb	Cash			$ 28,000.00
	To Common Stock				$ 28,000.00
20-May	Cash			$ 43,000.00
	Accounts Receivable			$ 38,000.00
	To Service Revenue				$ 81,000.00
31-Aug	Salaries Expense			$ 31,000.00
	To Cash				$ 31,000.00
1-Oct	Prepaid Rent			$ 20,000.00
	To Cash				$ 20,000.00
17-Nov	Supplies			$ 30,000.00
	To Accounts Payable				$ 30,000.00
30-Dec	Dividends			$   2,800.00
	To Cash				$   2,800.00

Adjusting Entries
Date	Particulars			Debit	Credit
31-Dec	Salaries Expense			$   4,800.00
	To Salaries Payable				$   4,800.00
31-Dec	Rent Expense			$   5,000.00
	To Prepaid Rent				$   5,000.00
	($ 20000 x 3/12)
31-Dec	Supplies Expense			$ 33,000.00
	To Supplies				$ 33,000.00
	($ 8800 + $ 30000 - $ 5800)
31-Dec	Deferred Revenue			$   5,800.00
	To Service Revenue				$   5,800.00

	Income Statement
	Service Revenue				$ 86,800.00
Less:	Expenses
	Salaries Expense			$ 35,800.00
	Rent Expense			$   5,000.00
	Supplies Expense			$ 33,000.00	$ 73,800.00
	Net Income				$ 13,000.00

	Statement of Retained Earnings
	Beginning Balance			$ 33,000.00
Add:	Net Income			$ 13,000.00
Less:	Dividends			$ (2,800.00)
	Ending Balance			$ 43,200.00

Balance Sheet
Assets
Cash			$   37,200.00
Accounts Receivable			$   38,000.00
Prepaid Rent			$   15,000.00
Supplies			$     5,800.00
Land			$   68,000.00
Total Assets			$ 164,000.00
Liabilities and Equity
Liabilities
Accounts Payable			$   30,000.00
Salaries Payable			$     4,800.00
Total Liabilities			$   34,800.00
Equity
Common stock			$   86,000.00
Retained Earnings			$   43,200.00
Total Equity			$ 129,200.00
Total Liabilities and Equity			$ 164,000.00