Question

Check my work On January 1, 2021, Red Flash Photography had the following balances: Cash, $27,000; Supplies, $9,500; Land, $75,000; Deferred Revenue, $6,500; Common Stock $65,000; and Retained Earnings, $40,000. During 2021, the company had the following transactions: 1. February 15 Issue additional shares of common stock, $35,000. 2. May 20 Provide services to customers for cash, $50,000, and on account, $45,000. 3. August 31 Pay salaries to employees for work in 2021, $38,000. 4. October 1 Purchase rental space for one year, $27,000. 5. November 17 Purchase supplies on account, $37,000. 6. December 30 Pay dividends, $3,500. The following information is available on December 31, 2021: 1. Employees are owed an additional $5,500 in salaries. 2. Three months of the rental space has expired. 3. Supplies of $6,500 remain on hand. 4. All of the services associated with the beginning deferred revenue have been performed. Exercise 3-20A Part 4 4. Prepare an income statement, statement of stockholders' equity, and classific balance sheet

Answer 1

Red Flash Photography Income Statement For the Year Ended December 31, 2021 Service Revenue 101,500 Expenses Salaries expense 43,500 Rent expense 6,750 Supplies expense 40,000 Total Expenses 90,250 Net Income 11,250

Red Flash Photography Statement of Stockholders Equity For the Year Ended December 31, 2021 Common Stock Retained Earnings Total Equity Balance, January 1, 2021 65,000 40,000 105,000 Issue of shares 35,000 35,000 Net Income 11,250 11,250 Dividends (3,500) (3,500) Balance, December 31, 2021 100,000 47,750 147,750

Red Flash Photography Balance Sheet As of December 31, 2021 Liabilities & Stockholders Equity Current Liabilities 43,500 Accounts Payable 45,000 Salaries Payable Assets Current Assets Cash 37,000 Accounts Receivable 5,500 Supplies 6,500 Prepaid Rent 20,250 115,250 Total Current Liabilities Total Current Assets 42,500 Stockholders Equity 75,000 Common Stock Retained earnings Total Stockholders Equity Fixed Assets Land 100,000 47,750 147,750 190,250 Total Liabilities & Stockholders Equity Total Assets 190,250