Preparing Adjusting Entries, Financial Statements, and Closing Entries

Fischer Card Shop is a small retail shop. Fischer's balance sheet at year-end 2013 is as follows. The following information details transactions and adjustments that occurred during 2014.

1. Sales total $64,174 in 2014; all sales were cash sales.

2. Inventory purchases total $33,528 in 2014; at December 31, 2014, inventory totals $6,380. Assume all purchases are made on account.

3. Accounts payable totals $1,804 at December 31, 2014.

4. Annual store rent for $10,560 and was paid on March 1, 2014, covering the next 12 months. The balance in prepaid rent at December 31, 2013, was the balance remaining from the advance rent payment in 2013.

5. Wages are paid every other week on Friday; during 2014, Fischer paid $5,500 cash for wages. At December 31, 2014, Fischer owed employees unpaid and unrecorded wages of $154.

6. Depreciation on equipment totals $748 in 2014.

Fischer Card Shop

Balance Sheet

December 31, 2013 Cash

$3,740 Accounts payable $2,288 Inventories

5,280 Wages payable 44 Prepaid rent

1,672 Total current liabilities 2,332 Total current assets

10,692 Total equity (includes retained earnings) 10,340 Equipment $3,300

Total liabilities and equity $12,672 Less Accumulated depreciation 1,320

Equipment, net

1,980

Total assets

$12,672

Prepare a T account