Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

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

(a) Prepare any necessary transaction entries for 2014 and adjusting entries at December 31, 2014, using the financial statement effects template.

Balance Sheet
Transaction Cash Asset + Noncash Assets - Contra-Assets = Liabilities + Contributed Capital + Earned Capital
(1) $Answer $Answer $Answer $Answer $Answer $Answer
(2) Answer Answer Answer Answer Answer Answer
(3) Answer Answer Answer Answer Answer Answer
(4) Answer Answer Answer Answer Answer Answer
(5) Answer Answer Answer Answer Answer Answer
(6) Answer Answer Answer Answer Answer Answer
Totals Answer + Answer - Answer = Answer + Answer + Answer
Income Statment
Revenue - Expenses = Net Income
$Answer $Answer $Answer
Answer Answer Answer
Answer Answer Answer
Answer Answer Answer
Answer Answer Answer
Answer Answer Answer
Answer - Answer = Answer

(b) Prepare its income statement for 2014, and its balance sheet at December 31, 2014.

Fischer Card Shop Income Statement AnswerDecember 31, 2014For the Year Ended December 31, 2014
AnswerCashInventoriesPrepaid RentAccumulated Depr.- Equip.Accounts PayableDepreciation ExpenseCost of Goods SoldRent ExpenseWages PayableWages ExpenseSales RevenueEquipmentRetained Earnings $Answer
AnswerCashInventoriesPrepaid RentAccumulated Depr.- Equip.Accounts PayableDepreciation ExpenseCost of Goods SoldRent ExpenseWages PayableWages ExpenseSales RevenueEquipmentRetained Earnings Answer
Gross profit Answer
Other expenses:
Rent Expense $Answer
Wages Expense Answer
Depreciation Expense Answer
Total other expenses Answer
Net income $Answer

Fischer Card Shop Balance Sheet
2014 2013
Assets:
AnswerCashInventoriesPrepaid RentAccumulated Depr.- Equip.Accounts PayableDepreciation ExpenseCost of Goods SoldRent ExpenseWages PayableWages ExpenseSales RevenueEquipmentRetained Earnings $Answer $Answer
Inventories Answer Answer
Prepaid rent Answer Answer
Total current assets Answer Answer
AnswerCashInventoriesPrepaid RentAccumulated Depr.- Equip.Accounts PayableDepreciation ExpenseCost of Goods SoldRent ExpenseWages PayableWages ExpenseSales RevenueEquipmentRetained Earnings Answer Answer
Less: Accumulated depreciation Answer Answer
Equipment, net Answer Answer
Total assets Answer Answer
Liabilities and equity:
AnswerCashInventoriesPrepaid RentAccumulated Depr.- Equip.Accounts PayableDepreciation ExpenseCost of Goods SoldRent ExpenseWages PayableWages ExpenseSales RevenueEquipmentRetained Earnings Answer Answer
Wages payable Answer Answer
Total liabilities Answer Answer
Total equity Answer Answer
Total liabilities and equity $Answer $Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Mr Barry Elliott, Jamie Elliott

16th Edition

027377817X, 978-0273778172

More Books

Students also viewed these Accounting questions