Answer:
Revised Balance Sheet on 31st December 2018
Cash, $26,000; +34,000+49,000 -37,000-26,000 -29,000 -3400 42600 42,600
Account Receivable...44,000 44000
Supplies, $9,400; +6,400 15800
Land, $74,000; 74000
Prepaid Rent....19,500 <u>19500</u>
Total........................................... <u>195,900.00</u>
Common Stock $64,000; and +34,000 98000
Retained Earnings, $39,000. -37,000+49,000+44,000-6,500-3400-5400+6400-29,600 56500
Accrued Wages 5400 5400
Accounts Payable 36,000 <u> 36000</u>
Total........................................... <u>195,900.00 </u>
<u />
Explanation:
On January 1, 2018, Red Flash Photography had the following balances:
Cash,............... $26,000;
Supplies,........... $9,400;
Land, ........ $74,000;
Total..................109, 400
Deferred Revenue, $6,400;
Common Stock..... $64,000;
Retained Earnings, $39,000.
Total.......................109,400
On 31st December 2018
Revised Balance Sheet on 31st December 2018
Cash, $26,000; +34,000+49,000 -37,000-26,000 -29,000 -3400 42600 42,600
Account Receivable...44,000 44000
Supplies, $9,400; +6,400 15800
Land, $74,000; 74000
Prepaid Rent....19,500 <u>19500</u>
Total........................................... <u>195,900.00</u>
Common Stock $64,000; and +34,000 98000
Retained Earnings, $39,000. -37,000+49,000+44,000-6,500-3400-5400+6400-29,600 56500
Accrued Wages 5400 5400
Accounts Payable 36,000 <u> 36000</u>
Total........................................... <u>195,900.00 </u>
<u />
1. February 15 Issue additional shares of common stock, $34,000.
ADD 34,000 TO EQUITY, AND TO CASH
2. May 20 Provide services to customers for cash, $49,000, and on account, $44,000.
LESS 49,000 FROM CASH AND ADD TO RETAINED EARNINGS AS INCOME, ADD 44,000 AS ACCOUNT RECEIVABLES AND ADD TO INCOME IN RETAINED EARNINGS
3. August 31 Pay salaries to employees for work in 2018, $37,000.
LESS 37,000 FROM CASH AND FROM RETAINED EARNINGS
4. October 1 Purchase rental space for one year, $26,000.
LESS FROM CASH AND FROM RETAINED EARNINGS
5. November 17 Purchase supplies on account, $36,000.
ADD TO STOCK, ADD TO ACCOUNTS PAYABLES
6. December 30 Pay dividends, $3,400.
LESS FROM CASH AND FROM RETAINED EARNINGS
The following information is available on December 31, 2018:
1. Employees are owed an additional $5,400 in salaries.
ADD TO ACCRUED SALARIES,LESS FROM RETAINED EARNINGS AS EXPENSES INCURRED IN THE PERIOD
2. Three months of the rental space has expired.
CREATE PREPAID RENT FOR 3/4 OF RENT (19,500) AND LESS 6500 FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD
3. Supplies of $6,400 remain on hand.
LESS 19600 (26,000-6400) FROM SUPPLIES AND FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD
4. All of the services associated with the beginning deferred revenue have been performed.
DELETE DEFFERED REVENUE OF 6,400 AND ADD SAME AMOUNT TO RETAINED EARNINGS AS INCOME EARNED
