Question

Required information [The following information applies to the questions displayed below.] 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. 2. Record the adjusting entries at the end of the year. (If no entry is required for a particular transaction/event, select "No Journal Entru Denuired" in the firet Account field Do not raind intormarlista calculatione

A) Record the adjusting entries at the end of the year for:

1. Salaries

2. Rent

3. Supplies

4. Deferred revenue

B) Prepare an adjusted trial balance

C) Prepare an income statement, statement of stockholder's equity, and classified balance sheet

D) Prepare closing entries for

1. Revenue accounts

2. Expense accounts

3. Dividend accounts

Answer 1

Adjustment entries: Please go through the attachment for entries

Adjusted Trial Balance: Along with the adjusted trial balance, a statement of opening balances and transactions in the current year and adjusting entries are shown in the table for better understanding purpose in the attachment.

Classify the accounts in the adjusted trial balance to revenue, expense, asset and liability.

Summary of all such are presented in attachments.

A) Adjustment entries D) Closing Entries Debit Credit Account Title Debit Credit 1. Salaries Salaries Expense $ 4,400 Salaries Payable $ 4,400 Note: In some cases, Outstanding salaries is credited instead of salaries payable Account Title 1. Revenue Accounts Service Revenue Income Summary $ 78,400 $ 78,400 2. Rent $ 64,400 Rent Expenses 4,000 Prepaid Rent $ 4,000 For one year 16,000, for 3 months 16,000*3/12 =4,000$ 2. Expense Accounts Income Summary Salaries Expense Rent Expense Supplies Expense $ 31,400 $ 4,000 $ 29,000 3. Supplies Supplies Expense $ 29,000 Supplies $ Opening + Purchases - Closing = Consumption 8,400 + 26,000 - 5,400 = 29,000 29,000 3. Dividend Account Retained Earnings Dividend 2,400 $ 2,400 4. Deferred Revenue Deferred Revenue $ 5,400 Service Revenue $ 5,400

Accounts Adjustments Debit Credit B) Adjusted Trial Balance January 1 2021 Transactions Debit Credit Debit Credit 16,000 -8,400 8,400 26,000 64,000 5,400 Cash Supplies Land Deferred Revenue Adjusted Trial Balance Debit Credit 7,600 5,400 64,000 29,000 5,400 24,000 54,000 29,000 78,000 29,000 34,000 34,000 73,000 5,400 78,400 4,400 Common stock Retained Earnings Accounts Receivable Service Revenue Salaries Expense Prepaid Rent Dividends Salaries Payable Rent Expense Supplies Expense 27,000 16,000 2,400 4,000 31,400 12,000 2,400 4,400 4,400 4,000 29,000 4,000 29,000 Net Income Total 88,400 88,400 97,000 97,000 42,800 42,800 189,800 189,800

C. Classified Balance sheet Assets Current Assets Cash Supplies Prepaid Rent Accounts Receivable Fixed Assets Land 7,600 5,400 12,000 34,000 59,000 64,000 123,000 Total Assets Liabilities and Equity Liabilities Salaries Payable 4,400 Equity Capital Stock Retained Earnings 78,000 40,600 118,600 Total Liabilities and equity 123,000 Income statement A. Revenues Service Revenue 78,400 B. Expenses Salaries Expense Rent Expense Supplies Expense Net Income 31,400 4,000 29,000 64,400 14,000 2b.Statement of Retained Earnings Dec-31 Beginning Balance of Retained Earnings 29,000 Add: Net Income 14,000 Less: Dividends 2,400 Closing Balance as on December 31 40,600