Exercise 3-20A Record transactions and prepare adjusting entries, adjusted trial balance, financial statements, and closing entries (LO3-3, 3-4, 3-5, 3-6, 3-7) (GL)

On January 1, 2021, Red Flash Photography had the following balances: Cash, $20,000; Supplies, $8,800; Land, $68,000; Deferred Revenue, $5,800; Common Stock $58,000; and Retained Earnings, $33,000. During 2021, the company had the following transactions:

1.		February		15		Issue additional shares of common stock, $28,000.
2.		May		20		Provide services to customers for cash, $43,000, and on account, $38,000.
3.		August		31		Pay salaries to employees for work in 2021, $31,000.
4.		October		1		Purchase rental space for one year, $20,000.
5.		November		17		Purchase supplies on account, $30,000.
6.		December		30		Pay dividends, $2,800.

The following information is available on December 31, 2021:

1. Employees are owed an additional $4,800 in salaries.
2. Three months of the rental space has expired.
3. Supplies of $5,800 remain on hand.
4. All of the services associated with the beginning deferred revenue have been performed.

• Requirement
• General Journal
• General Ledger
• Trial Balance
• Income Statement
• Statement of SE
• Balance Sheet

1. Record each of the transactions listed above in the 'General Journal' tab. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.

2. Record the adjusting entries in the 'General Journal' tab.

3. Review the adjusted 'Trial Balance' as of December 31, 2021.

4. Prepare an income statement for the year ended December 31, 2021, in the 'Income Statement' tab.

5. Prepare the statement of Stockholder's Equity for the year ended December 31, 2021, in the 'Income Statement' tab.

6. Prepare a classified balance sheet as of December 31, 2021 in the 'Balance Sheet' tab.

7. Record the closing entries in the 'General Journal' tab.