The following information applies to the questions displayed below. On January 1
ID: 2342697 • Letter: T
Question
The following information applies to the questions displayed below. On January 1, 2018, Red Flash Photography had the following balances: Cash, $28,000: Supplies, $9,600 Land, $76,000; Deferred Revenue, $6,600: Common Stock $66,000; Retained Earnings, $41,000. During 2018, the company had the following transactions: 1. February 15 Issue additional shares of common stock, $36,000. 2. May 20 Provide services to customers for cash, $51,000, and on account, $46,000 August 31 Pay salaries to employees for work in 2018, $39,000 4. October 1 Purchase rental space for one year, $28,000 5. November 17 Purchase supplies on account, $38,000 6. December 30 Pay dividends, $3.600. The following information is available on December 31, 2018 1. Employees are owed an additional S5,600 in salaries. 2. Three months of the rental space has expired. 3. Supplies of $6,600 remain on hand. 4. All of the services associated with the beginning deferred revenue have been performed.Explanation / Answer
Answer
Transaction
General Journal
Debit
Credit
1
Cash
$ 36,000.00
[Feb 15]
Common Stock
$ 36,000.00
(common stock issued)
2
Accounts receivables
$ 46,000.00
[May 20]
Cash
$ 51,000.00
Service Revenue
$ 97,000.00
(Services provided on cash and on account)
3
Salaries expenses
$ 39,000.00
[Aug 31]
Cash
$ 39,000.00
(Salaries paid)
4
Prepaid rent
$ 28,000.00
[Oct 1]
Cash
$ 28,000.00
(Rent paid for 1 year in advance)
5
Supplies
$ 38,000.00
[Nov 17]
Accounts Payable
$ 38,000.00
(Supplies purchased on account)
6
Dividends
$ 3,600.00
[Dec 30]
Cash
$ 3,600.00
(Cash dividend paid)
Transaction
General Journal
Debit
Credit
1
Cash
$ 36,000.00
[Feb 15]
Common Stock
$ 36,000.00
(common stock issued)
2
Accounts receivables
$ 46,000.00
[May 20]
Cash
$ 51,000.00
Service Revenue
$ 97,000.00
(Services provided on cash and on account)
3
Salaries expenses
$ 39,000.00
[Aug 31]
Cash
$ 39,000.00
(Salaries paid)
4
Prepaid rent
$ 28,000.00
[Oct 1]
Cash
$ 28,000.00
(Rent paid for 1 year in advance)
5
Supplies
$ 38,000.00
[Nov 17]
Accounts Payable
$ 38,000.00
(Supplies purchased on account)
6
Dividends
$ 3,600.00
[Dec 30]
Cash
$ 3,600.00
(Cash dividend paid)
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