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SnapShot Company, a commercial photography studio, has just completed its first full year of operations on December 3 1 . General ledger account balances before
SnapShot Company, a commercial photography studio, has just completed its first full year of operations on December General ledger account balances before final yearend adjustments follow. Assume that all balances are normal and that no adjusting entries were made to the accounts at any time during the year.
Account Balance
Cash $
Accounts receivable
Prepaid software subscription contract
Prepaid insurance
Supplies
Equipment
Accounts payable
Performance obligations
Common stock
Photography fee revenue
Wages expense
Utilities expense
An analysis of the firm's records discloses the following:
Photography services of $ have been rendered, but customers have not yet paid or
been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed.
Equipment, purchased January has an estimated life of years.
Utilities expense for December is estimated to be $ but the bill will not arrive or be paid
until January of next year.
The balance in Prepaid Software Subscription Contract represents the amount paid on January
for a year contract for highfunctioning photo editing software and its updates.
In November, customers paid $ cash in advance for photos to be taken for the
holiday season. When received, these fees were credited to Performance Obligations. By
December all of the services related to these fees had been performed.
A year insurance premium paid on January was debited to Prepaid Insurance.
Supplies available at December are $
At December wages expense of $ has been incurred but not paid or recorded.
Prepare the company's adjusting entries using the financial statement effects template.
Balance Sheet Income Statement
Cash Noncash Contra Contributed Earned Net
Transaction Asset Assets Assets Liabilities Capital Capital Revenues Expenses Income
Record unbilled fees. Answer
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Record depreciation. Answer
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Record December utilities. Answer
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Recognize software expense. Answer
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Recognize photo revenues. Answer
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Recognize insurance expense Answer
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Recognize supplies expense. Answer
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Record wage expense. Answer
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Totals
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