A B D E w N 4 3 3 Shadow Box Photo Studio, Inc. went into business as a corporation in early 2018. For the first few years, the company provided photography services only (no merchandise). During 2021, the company began selling framed 1 photographic artwork, and decided to use the FIFO inventory method. The other worksheets include the Sheet Name 2 3 1 Shadow Box's trial balance on January 1, 2021. Beg TB Background Info 2 A list of events that occurred during 2021. Events Background Info An accounting equation grid for you to analyze the impacts of the events. Grid Completion Required Note check totals on rows 42-46 4 A worksheet to analyze the cost of inventory and the cost of goods sold. Inventory Completion Required Enough rows are provided after each event to list all the inventory layers at their costs. A worksheet to prepare appropriate transaction and adjusting journal 5 J-ES entries. Completion Required 6 A worksheet to prepare the 2021 Adjusted Trial Balance. Ad TB Completion Required 7 Worksheets to prepare the 2021 financial statements. Fin St Completion Required 8 A worksheet to prepare the 2021 closing journal entries. Closing Completion Required 5 6 in 10 00 7 8 9 10 11 12 13 14 4 Shown below is the Post-Closing Trial Balance for Shadow Box at the end of 3 Shadow Box Photo Studio, Inc. Post-Closing Trial Balance 5 as of December 31, 2020 6 7 Account Debit Credit 8 Cash 12,118 9 Accounts receivable 2,324 10 Supplies 149 11 Prepaid rent 664 12 Inventory 13 Land 3,320 14 Accounts payable 0 15 Salaries payable 8631 16 Unearned revenue 747 17 Common stock 6,640 18 Retained earnings 10,325 19 Dividends declared 20 Service revenue 0 21 Product sales 0 22 Cost of goods sold 23 Supplies expense 24 Salaries expense 0 25 Rent expense 26 Utilities expense 0 27 Advertising expense 0 28 Other operating expenses 0 29 TOTALS 18,575 18,5751 30 0 0 0 A B D 4 6 7 8 9 1. Following are the events for Shadow Box during 2021. 3 a) Jan. 3, 2021 - Shadow Box paid the salaries payable from 2020. b) Jan. 8, 2021 - The company acquired an additional $41,500 cash from the issue of common stock. 5 C) Jan. 12, 2021 - The company paid $747 cash for supplies to be used by the business. d) Jan. 15, 2021 - Shadow Box purchased 40 framed photographs for later sale at a cost of $13,650. The framed photographs were purchased on account with the terms 1/10, n/30. e) Jan 24, 2021 - Shadow Box decided to pay $5,000 of its accounts payable balance from event (d) before the discount period expired, so Shadow Box first applied the discount to the $5,000 amount so it could reduce its accounts payable balance (note: the actual payment is described in event (f) below). After applying this discount, Shadow Box's inventory cost was $340 for f) Jan. 24, 2021 - Shadow Box paid cash to settle parts of its accounts payable balance as described in event (e). g) Feb. 6, 2021 - The company sold 24 framed photographs for a total price of $14,940. Sales of $10,790 were on account, while $4,150 were cash sales. 10 h) Feb. 6, 2021 - The cost to Shadow Box of each product sold in event (g) was $340. 11 i) Feb. 9, 2021 - The company paid the workers a total of $6,972 in salaries. j) Feb. 22, 2021 - The company provided $29,880 of Photography and photographic artwork services. The services were billed to the customers. 13 k) Mar. 1, 2021 - Shadow Box rented a business van, paying $3,984 in advance for a one year 0) Mar. 7, 2021 - Paid cash to settle additional accounts payable in the amount of $3,137. The payment was made after the discount period expired. 15 m) Mar. 16, 2021 - Collected $31,540 of accounts receivable. n) Apr. 14, 2021 - Shadow Box performed $11,620 worth of Photography and photographic 16 artwork services for a local college; $9,960 was on account and $1,660 was for cash. 170) May. 1, 2021 - Paid $5,976 for one year's rent on office space in advance. p) May. 8, 2021 - Shadow Box purchased, and paid cash, for 12 framed photographs for later sale at a cost of $345 each. 9) May. 24, 2021 - The company paid accounts payable of $1,195, but not within the discount period (the company uses the gross method). r) Jun. 1, 2021 - Shadow Box rented a larger building; paid $5,478 for 12 months' rent in advance. 20 s) Jun. 5, 2021 - Shadow Box purchased, and paid cash, for 5 framed photographs for later sale at 21 a cost of $352 each. t) Jun. 10, 2021 - Shadow Box purchased 10 framed photographs for later sale at a cost of $355 22 each. The purchase was on account. u) Jun. 18, 2021 - The company sold 36 framed photographs for a total price of $23,240. Sales of 12 14 18 19 w 27 28 u) Jun. 18, 2021 - The company sold 36 framed photographs for a total price of $23,240. Sales of 23 $16,600 were on account, while $6,640 were cash sales. v) Jun. 18, 2021 - Record the cost of goods sold related to the sale from event (u) using the 24 perpetual FIFO method. w) Jul. 1, 2021 - Made a full refund to a dissatisfied customer who returned a framed photograph. The sale had been a cash sale for $913 with a cost of $352. Record the revenue part of the 25 event. x) Jul. 1, 2021 - Made a full refund to a dissatisfied customer who returned a framed photograph. The sale had been a cash sale for $913 with a cost of $352. Record the cost part of the event. 26 Y) Jul. 7, 2021 - Paid employees a total of $9,130 cash for salaries employees earned during the current period. 2) Aug. 18, 2021 - Provided $26,560 of Photography and photographic artwork services during the year. The services were billed to the customers. aa) Sep. 30, 2021 - Recognized $664 of service revenue earned during the first nine months of the year; it had been collected in the prior year. bb) Oct. 1, 2021 - Sold additional Photography and photographic artwork services worth $332 for 30 one year's service, starting immediately. The customers paid cash for the full amount. 31 cc) Nov. 7, 2021 - Collected $42,330 of accounts receivable. dd) Nov. 15, 2021 - Paid an additional $4,565 to settle some accounts payable; the payment was made after the discount period expired. 33 ee) Dec. 28, 2021 - Paid $2,324 of advertising expense during the year. 34 ff) Dec. 29, 2021 - Paid $3,469 of utilities expense for the year. 35 gg) Dec. 29, 2021 - Paid $10,350 of other operating expense for the year. 36 hh) Dec. 30, 2021 - Paid a cash dividend of $9,960 to the shareholders. 37 ii) Dec. 31, 2021 - There was $524 of supplies on hand at the end of the year. jj) Dec. 31, 2021 - Recognized the expired rent from the prior year, van (event (k)), office space 38 (event (o)), and the building (event (r)) for the year. 39 kk) Dec. 31, 2021 - Recognized revenue for the current year earned from event (bb). 40 ) Dec 31, 2021 - Accrued salaries at December 31 were $996. 29 32 - 41 A B D G H 1 J L M N 0 P Q R U V W X Y E F Assets K Liabilities S T Equity 1 Las h Flo Event Produ Cost of Cash Accou nts receiv able Suppli Prepai Invento es d rent Land Accou Salarie Unear nts s ned payabl payabl revenu e Retain Divide Servic Comm ed nds e on earnin declar revenu stock gs ed e ct sales goods sold Suppli Salarie es s expenexpen se se Rent expen se Other Utilitie Adverti operati s sing ng expen expen expen se se ses 0 0 0 0 Cat e e e 2 3 149 664 0 3,320 0 747 6,640 ##### 0 0 - 0 0 0 0 0 0 863 (863) ( 4 5 = 21 = 1 1 6 7 7 8 8 9 9 ... 10 11 I... 1 Begin Bala 12,118 2,324 a) Operl (863) ) b) o) Ji d) e) f) g g) 1. h) i) !! 1) 1.3 k) 1) __ m) n) n o) 1 1 12 13 . 14 1 1 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 1 F 15 .. 16 . 17 18 .. 19 . 20 21 22 23 ... 24 25 26 11 11 p) 9) 4) 1) s) s t) . u) u ) V) w) . X] y) z) aa) bb) co) dd) 27 28 29 30 31 32 33 34 ee) 35 ff) 99) 33 hh) 36 37 = I= 38 ii) 39 ii) ) 40 kk) 41 42 Ending Bal 0######### 524 4,939 2,837 3,320 3,303 996 332 + +++++ ######################### (372]] ######################### 1 DEF G H 1 Below is worksheet to analyze the cost of inventory and the cost of goods sold. 2. Remember, Shadow Box uses the FIFO inventory method. 3 (hint: enter purchases as positive quantities and sales as negative quantities) Value Value Event Quantity Unit Cost Quantity Balance Change Balance 5 d) 40 $341.25 $13,650 40 @ $341.25 $13,650 6 e) discount $5,000.00 ($50) 40 @ $340.00 $13,600 7 h) (24) $340.00 ($8,160) 16 @ $340.00 $5,440 4 + in 00 0 p) 9 5) 10 11 12 13 14 15 t) 16 17 18 19 u) ) 20 21 22 x) 23 Chart of Accounts Accounting Eq Impacts 100 Cash A+ Assets up Use the worksheet below to prepare the appropriate transaction and adjusting journal entries for Shadow Box. For all journal entries, you must only use account names from the Chart of Accounts in cells 12 thru 125, and you must only use Accounting Equation Impact codes from the list in cells K2 thru K7. a) Jan. 3, 2021 - Shadow Box paid the salaries payable from 2020. Accountin Date g Eq Account Names Debits Credits Impacts 1/3/21 L- Salaries Payable 863 110 Accounts Receivable A- Assets down 120 Prepaid rent A- Cash 863 130 Supplies (on hand) L+ Liabilities up Liabilities L- down SEE Equity up SE- Equity down 140 Inventory 150 Equipment b) completed as an example Jan. 8, 2021 - The company acquired an additional $41,500 cash from the issue of common stock. Accountin Date g Eq Account Names Debits Credits Impacts 155 Accum. Deprec. (Equip.) 170 Land 210 Accounts Payable 220 Salaries Payable 240 Unearned Revenue c) Jan. 12, 2021 - The company paid $747 cash for supplies to be used by the business. Accountin Date Account Names Debits Credits Impacts g Eq 250 Notes Payable 310 Common Stock 350 Retained Earnings 410 Dividends Declared d) 510 Service Revenue Jan. 15, 2021 - Shadow Box purchased 40 framed photographs for later sale at a cost of $13,650. The framed photographs were purchased on account with the terms 1/10, n/30. Accountin Date g Eq Account Names Debits Credits Impacts 520 Product Sales 600 Cost of Goods Sold 610 Supplies Expense 640 Salaries Expense e) Jan. 24, 2021 - Shadow Box decided to pay $5,000 of its accounts payable balance from event (d) before the discount period expired, so Shadow Box first applied the discount to the $5,000 amount so it could reduce its accounts payable balance (note: the actual payment is described in event (f) 650 Rent Expense 1 Use the worksheet below to prepare the Adjusted Trial Balance for Shadow 3 Shadow Box Photo Studio, Inc. 1 Adjusted Trial Balance 5 as of December 31, 2021 5 7 Account Debit Credit 3 Cash Accounts receivable o Supplies 1 Prepaid rent 2 Inventory 3 Land 4 Accounts payable 5 Salaries payable 6 Unearned revenue 7 Common stock 8 Retained earnings 9 Dividends declared O Service revenue 1 Product sales 2 Cost of goods sold -3 Supplies expense -4 Salaries expense -5 Rent expense C6 Utilities expense E7 Advertising expense -8 Other operating expenses 9 TOTALS 0 Use the worksheets below to prepare the 2021 financial statements for Shadow Box. Shadow Box Photo Studio, Inc. Shadow Box Photo Studio, Inc. Income Statement Balance Sheet For the Year Ended December 31, 2021 As of December 31, 2021 Service revenue Cash Product sales, net Accounts receivable Cost of Goods Supplies Gross Margin Prepaid rent Supplies expense Inventory Salaries expense Land Rent expense TOTAL ASSETS Utilities expense Accounts payable Advertising expense Salaries payable Other operating expenses Unearned revenue Net Income Subtotal Liabilities Retained earnings Shadow Box Photo Studio, Inc. Common stock Statement of Changes in Stockholders' Equity Subtotal Equity For the Year Ended December 31, 2021 TOTAL LIABILITIES & EQUITY Beginning common stock Plus: Common stock issued Shadow Box Photo Studio, Inc. Ending Common Stock Statement of Cash Flows Beginning retained earnings For the Year Ended December 31, 2021 Plus: Net Income Cash flows from operating activities Less: Dividends Cash receipts from customers Ending Retained Earnings Cash payments for expenses TOTAL STOCKHOLDERS' EQUITY Net cash flow from operating activities Net cash flow from investing activities Cash flows from financing activities Cash receipts from stock issued Cash payments for dividends Net cash flow from financing activities Net increase in cash Plus: beginning cash balance Ending Cash Balance Chart of Accounts Accounting Eq Impacts Assets up 100 Cash A+ Use the worksheet below to prepare the appropriate closing journal entries for Shadow Box. For all journal entries, you must only use account names from the Chart of Accounts in cells 12 thru 125, and you must only use Accounting Equation Impact codes from the list in cells K2 thru K7. a) Close revenue accounts. Accountin Date g Eq Account Names Debits Credits Impacts 12/31/21 110 Accounts Receivable A- Assets down 120 Prepaid rent L+ Liabilities up 130 Supplies (on hand) L- Liabilities down Equity up 140 Inventory 150 Equipment SE+ SE Equity down b) Close expense accounts. Accountin Date g Eq Impacts 12/31/21 Account Names Debits Credits 155 Accum. Deprec. (Equip.) 170 Land 210 Accounts Payable 220 Salaries Payable 240 Unearned Revenue 250 Notes Payable 310 Common Stock 350 Retained Earnings 410 Dividends Declared 510 Service Revenue d) Close dividends account. Accountin Date g Eq Impacts 12/31/21 Account Names Debits Credits 520 Product Sales 600 Cost of Goods Sold 610 Supplies Expense 640 Salaries Expense 650 Rent Expense 660 Utilities expense 670 Advertising expense 690 Other Operating Expenses