Problem:
On January 1, 2015, Red Flash Photography had the following balances: Cash, $15,000; Supplies, $7,000; Land, $64,000; Unearned Revenue, $6,000; Common Stock $60,000; Retained Earnings, $20,000. During 2015, the company had the following transactions: 1. Issue additional shares of common stock, $22,000. 2. Provide services to customers for cash, $40,000, and on account, $30,000. 3. Pay salaries to employees for work in 2015, $25,000. 4. Purchase rental space for one year, $18,000. 5. Purchase supplies on account, $20,000. 6. Pay dividends, $3,000. The following information is available on December 31, 2015: 1. Employees are owed an additional $5,000 in salaries. 2. Three months of the rental space has expired. 3. Supplies of $4,000 remain on hand. 4. All of the services associated with the beginning unearned revenue have been performed.
Required:
Question 1: Record the transactions that occurred during the year.
Question 2: Record the adjusting entries at the end of the year.
Question 3: Prepare an adjusted trial balance.
Question 4: Prepare an income statement, statement of stockholders' equity, and classified balance sheet.
Question 5: Prepare closing entries.