
Concept explainers
On January 1, 2018, Red Flash Photography had the following balances: Cash, $12,000; Supplies, $8,000; Land, $60,000; Deferred Revenue, $5,000; Common Stock $50,000; and
1. February 15 Issue additional shares of common stock, S20,000.
2. May 20 Provide services to customers for cash, $35,000, and on account, $30,000.
3. August 31 Pay salaries to employees for work in 2018, $23,000.
4. October 1 Purchase rental space for one year, $12,000.
5. November 17 Purchase supplies on account, $22,000.
6. December 30 Pay dividends, $2,000.
The following information is available on December 31, 2018:
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 deferred revenue have been performed.
Required:
1. Record the transactions that occurred during the year.
2. Record the
3. Prepare an adjusted
4. Prepare an income statement, statement of stockholders’ equity, and classified
5. Prepare closing entries.

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Chapter 3 Solutions
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