Answer:
<u> Red Flash Photography </u>
<u>Balance Sheet as at January 1, 2018,</u>
<u> Assets </u>
Cash,............... $26,000
Supplies,........... $9,400
Land, ........ .......<u>$74,000</u>
Total..................<u>109, 400</u>
<u>Capital and Liabilities</u>
Deferred Revenue... $6,400
Common Stock..... ..$64,000
Retained Earnings...<u>$39,000.</u>
Total............................<u>109,400 </u>
<u> Red Flash Photography </u>
Balance Sheet as at 31st December 2018
Revised Balance Sheet on 31st December 2018
<u>Assets</u>
Cash..........................................42,600
Account Receivable............ 44,000
Supplies....................................15,800
Land..........................................74,000
Prepaid Rent............................<u>19,500 </u>
Total...........................................<u> 195,900</u>
<u>Capital & Liabilities</u>
Common Stock ......................98,000
Retained Earnings.................56,500
Accrued Wages........................5,400
Accounts Payable...................<u>36,000</u>
Total........................................... <u>195,900</u>
Explanation:
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 DEFERRED REVENUE OF 6,400 AND ADD SAME AMOUNT TO RETAINED EARNINGS AS INCOME EARNED
