Question
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.
|
|
(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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started