Required: 1. Prepare a classified income statement for the year ended December 3
ID: 2400268 • Letter: R
Question
Required: 1. Prepare a classified income statement for the year ended December 31, 2019. The company does not classify its operating expenses as selling expenses and general and administrative expenses. 2. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the year. 3. Prepare a classified balance sheet as of December 31, 2019. ? Analyze:?What is the inventory turnover for Artisan Wines? Required: 1. Prepare a classified income statement for the year ended December 31, 2019. The company does not classify its operating expenses as selling expenses and general and administrative expenses. 2. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the year. 3. Prepare a classified balance sheet as of December 31, 2019. ? Analyze:?What is the inventory turnover for Artisan Wines?
The Artisan Wines is a retail store selling vintage wines. On December 31, 2019, the firm's general ledger contained the accounts and balances below. All account balances are normal. Artisan Wines Worksheet Year Ended December 31, 2019 Trial Balance Adjusted Trial Balance ?none Statement 29,086.00 29,086.00 Accounts Receivable Prepaid Advertiaing 300.00 Merchandise Inventory Store Equipment Accumulated Depreciation-Store Equipment office Equipment Aecumulated Depreciation-Office Equipment Notes Payable, due 2020 15,700.00 28,500.00 12,700.00 15,700.00 12,700.00 3, 300.00 1,070.00 28,500.00 3,700.00 5,700.00 1,570.00 23,500.00 3,405.00 2,640.0? 23,500.00 Payable Social Security Tax Payable Medichre Tax Payable Unearned Seminar Fees Interest Payable Vincent Arroyo, Capital vincent Arroyo, Draving Incone Summary 8,100.00 ,400.00 2,700.00 31,230.00 31,230.00 14,810.00 15,700.00 12.700.00 15,700.00 12,700.00 15,700.00 12,700.00 160,970.00 160,970.00 160,970.00 Sales Discounts 5,400.00 94,500.00 94,500.00 Purchases Returns and Allowances 1,070.00 13,900.00 24,700.00 295.00 13,900.00 25,300.00 Rent Expense 13,900.00 25,300.00 Payroll Taxes Expense Depreciation Expense-Store Equipment Depreciation Expense-Office Equipment 1,070.00 00.00 Interest Expense
Explanation / Answer
Answer 1. ARTISAN WINES Income Statement For the Year Ended Dec 31, 2019 Operating Revenue Sales 160,970.00 Less: Sales Discount 270.00 Net Sales 160,700.00 Cost of Goods Sold Merchandise Inventory, Beginning 15,700.00 Purchases 94,500.00 Freight In 295.00 Delivered Cost of Purchases 94,795.00 Less: Purchase Returns & Allowances 1,070.00 Net Delivered Cost of Purchases 93,725.00 Goods Available For Sale 109,425.00 Less: Merchandise Inventory, Ending 12,700.00 Cost of Goods Sold 96,725.00 Gross Profit on Sales 63,975.00 Operating Expenses Rent Expense 13,900.00 Wages Expense 25,300.00 Payroll Taxes Expense 4,069.90 Depreciation Expense - Store Equipment 3,300.00 Depreciation Expense - Office Equipment 1,070.00 Advertising Expense 300.00 Supplies Expense 235.00 Total Operating Expenses 48,174.90 Income from Operations 15,800.10 Other Income Seminar Fee Income 5,400.00 Other Expenses Interest Expense 337.50 Net Non Operating Income 5,062.50 Net Income 20,862.60 Answer 2. ARTISAN WINES Statement of Owners' Equity For the Year Ended Dec 31, 2019 Vincent Arroyo, Capital, Beginning 31,230.00 Net Income 20,862.60 Less: Withdrawls for the Year 14,810.00 Increase in Capital 6,052.60 Vincent Arroyo, Capital, Ending 37,282.60 Answer 3. ARTISAN WINES Balance Sheet Dec 31, 2019 Assets Current Assets Cash 29,086.00 Accounts Receivable 570.00 Prepaid Advertising 600.00 Supplies 135.00 Merchandise Inventory 12,700.00 Total Current Assets 43,091.00 Plant & Equipment Store Equipment 28,500.00 Accumulated Depreciation - Store Equip. (7,000.00) 21,500.00 Office Equipment 5,700.00 Accumulated Depreciation - Office Equip. (2,640.00) 3,060.00 Total Plant & Equipment 24,560.00 Total Assets 67,651.00 Liabilities & Owners' Equity Liabilities Current Liabilities Notes Payable, Due 2020 23,500.00 Accounts Payable 3,405.00 Wages payable 600.00 Social Security Tax Payable 37.20 Medicare Tax Payable 8.70 Unearned Seminar Fees 2,700.00 Interest Payable 117.50 Total Current Liabilities 30,368.40 Long Term Liabilities - Total Liabilities 30,368.40 Owners' Equity Vincent Arroyo, Capital 37,282.60 Total Owners' Equity 37,282.60 Total Liabilities & Owners' Equity 67,651.00 Answer 4. Inventory Turnover = Cost of Goods Sold / Average Inventory Average Inventory = ($15,700 + $12,700) / 2 = $14,200 Inventory Turnover = $96,725 / $14,200 Inventory Turnover = 7.61614 or say 7.62 times (Approx.)
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