Required information Exercise 3-20 (Algo) Record transactions and prepare adjusting entries, adjusted trial balance, financial statements, and closing entries (LO3-3, 3-4, 3-5, 3-6, 3-7) [The following information applies to the questions displayed below.] On January 1, 2024, Red Flash Photography had the following balances: Cash, $27,000; Supplies, $9,500; Land, $75,000; Deferred Revenue, $6,500; Common Stock $65,000; and Retained Earnings, $40,000. During 2024, the company had the following transactions: 1. February 15 Issue additional shares of common stock, $35,000. 2. May 20 3. August 31 4. October 1 5. November 17 6. December 30 Provide services to customers for cash, $50,000, and on account, $45,000. Pay salaries to employees for work in 2024, $38,000. Purchase rental space for one year, $27,000. Purchase supplies on account, $37,000. Pay dividends, $3,500. The following information is available on December 31, 2024: 1. Employees are owed an additional $5,500 in salaries. 2. Three months of the rental space have expired. 3. Supplies of $6,500 remain on hand. All other supplies have been used. 4. All of the services associated with the beginning deferred revenue have been performed. Stmt of Income Statement Stockholders Balance Sheet Equity Prepare an income statement. RED FLASH PHOTOGRAPHY Income Statement For the Year Ended December 31, 2024 Service Revenue Expenses: Salaries Expense Rent Expense Supplies Expense Total Expenses Net Income 43,500 6,750 40,000 $ 101,500 90,250 $ 11,250 Stmt of Income Statement Stockholders Balance Sheet Equity Prepare a statement of stockholders' equity. RED FLASH PHOTOGRAPHY Statement of Stockholders' Equity For the Year Ended December 31, 2024 Common Retained Stock Earnings Total Stockholders' Equity Balance at January 1 $ 65,000 $ 40,000 Add: Issuance of Common Stock 35,000 Add: Net Income 11,250 Less: Dividends 3,500 Balance at December 31 $ 100,000 Current assets: Assets RED FLASH PHOTOGRAPHY Balance Sheet December 31, 2024 Current liabilities: Liabilities Cash $ 43,500 Accounts Payable Accounts Receivable Prepaid Rent Supplies 45,000 Salaries Payable $ 37,000 5,500 20,250 6,500 Total current assets 115,250 Total current liabilities 42,500 Long-term assets: Land 75,000 Stockholder's Equity Accumulated Depreciation Common Stock 100,000 Retained Earnings 47,750 Total stockholders' equity 147,750 Total assets 190,250 Total liabilities and stockholders' equity $ 190,250