Accounting Exercise

On January 1, 2015, Red Flash Photography had the following balances: Cash, $12,000; Supplies, $8,000; Land, $60,000; Unearned Revenue, $5,000; Common Stock $50,000; Retained Earnings, $25,000. During 2015, the company had the following transactions:

1.

Issue additional shares of common stock, $20,000.

2.

Provide services to customers for cash, $35,000, and on account, $30,000.

3.

Pay salaries to employees for work in 2015, $23,000.

4.

Purchase rental space for one year, $12,000.

5.

Purchase supplies on account, $22,000.

6.

Pay dividends, $2,000.

The following information is available on December 31, 2015:

1.

Employees are owed an additional $4,000 in salaries.

2.

Three months of the rental space has expired.

3.

Supplies of $5,000 remain on hand.

4.

All of the services associated with the beginning unearned revenue have been performed.

Required:

1.

Record the transactions that occurred during the year.

2.

Post journal entries to T-account (Don’t forget beginning balance if any).

3.

Prepare Trial balance.

4.

Record the adjusting entries at the end of the year.

5.

Prepare an adjusted trial balance.

6.

Prepare an income statement, statement of stockholders’ equity, and classified balance sheet.

7.

Prepare closing entries.

8.

Prepare post-closing trial balance.