The Artisan Wines is a retail store selling vintage wines. On December 31, 2019,
ID: 2519901 • Letter: T
Question
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.
Cash
$
28,386
Accounts Receivable
500
Prepaid Advertising
480
Supplies
300
Merchandise Inventory
15,000
Store Equipment
25,000
Accumulated Depreciation—Store Equipment
3,000
Office Equipment
5,000
Accumulated Depreciation—Office Equipment
1,500
Notes Payable, due 2020
20,000
Accounts Payable
2,705
Wages Payable
Social Security Tax Payable
Medicare Tax Payable
Unearned Seminar Fees
6,000
Interest Payable
Vincent Arroyo, Capital
32,700
Vincent Arroyo, Drawing
14,110
Income Summary
Sales
153,970
Sales Discounts
200
Seminar Fee Income
Purchases
91,000
Purchases Returns and Allowances
1,000
Freight In
225
Rent Expense
13,200
Wages Expense
24,000
Payroll Taxes Expense
3,324
Depreciation Expense—Store Equipment
Depreciation Expense—Office Equipment
Advertising Expense
Supplies Expense
Interest Expense
150
ADJUSTMENTS:
a.–b. Merchandise inventory at December 31, 2019, was counted and determined to be $13,000.
The amount recorded as prepaid advertising represents $480 paid on September 1, 2019, for 12 months of advertising.
The amount of supplies on hand at December 31 was $160.
Depreciation on store equipment was $3,000 for 2019.
Depreciation on office equipment was $1,125 for 2019.
Unearned Seminar Fees represent $6,000 received on November 1, 2019, for six seminars. At December 31, four of these seminars had been conducted.
Wages owed but not paid at December 31 were $500.
On December 31, 2019, the firm owed the employer’s social security tax ($31.00) and Medicare tax ($7.25).
The note payable bears interest at 6 percent per annum. One month’s interest is owed at December 31, 2019.
Required:
Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
Enter the adjustments above in the Adjustments section of the worksheet.
Complete the worksheet.
Analyze:
What was the amount of revenue earned by conducting seminars during the year ended December 31, 2019?
Cash
$
28,386
Accounts Receivable
500
Prepaid Advertising
480
Supplies
300
Merchandise Inventory
15,000
Store Equipment
25,000
Accumulated Depreciation—Store Equipment
3,000
Office Equipment
5,000
Accumulated Depreciation—Office Equipment
1,500
Notes Payable, due 2020
20,000
Accounts Payable
2,705
Wages Payable
Social Security Tax Payable
Medicare Tax Payable
Unearned Seminar Fees
6,000
Interest Payable
Vincent Arroyo, Capital
32,700
Vincent Arroyo, Drawing
14,110
Income Summary
Sales
153,970
Sales Discounts
200
Seminar Fee Income
Purchases
91,000
Purchases Returns and Allowances
1,000
Freight In
225
Rent Expense
13,200
Wages Expense
24,000
Payroll Taxes Expense
3,324
Depreciation Expense—Store Equipment
Depreciation Expense—Office Equipment
Advertising Expense
Supplies Expense
Interest Expense
150
Explanation / Answer
Revenue earned by consucting seminar is $4000
Uadjusted Trial Balance Adjsuting Entries Adjusted Trial Balance Income statement Balance Sheet Dr Cr Dr Cr Dr Cr Expenses Revenue Assets Liabilities Cash 28,386 28,386 28,386 Accounts Receivable 500 500 500 Prepaid Advertising 480 160 320 320 (480*4/12) Supplies 300 140 160 160 (300-160) Merchandise Inventory 15,000 13000 15000 13,000 13,000 Store Equipment 25,000 25,000 25,000 Accumulated Depreciation—Store Equipment 3,000 3000 6,000 6,000 Office Equipment 5,000 5,000 5,000 Accumulated Depreciation—Office Equipment 1,500 1125 2,625 2,625 Notes Payable, due 2020 20,000 20,000 20,000 Accounts Payable 2,705 2,705 2,705 Wages Payable 500 500 500 Social Security Tax Payable 31 31 31 Medicare Tax Payable 7.25 7.25 7.25 Unearned Seminar Fees 6,000 4000 (6000/6*4) Interest Payable 100 100 100 (20000*6%*1/12) Vincent Arroyo, Capital 32,700 32,700 40397.75 (32700-14110+21807.75) Vincent Arroyo, Drawing 14,110 14,110 Income Summary 15000 13000 Sales 153,970 153,970 153,970 Sales Discounts 200 200 200 Seminar Fee Income 4000 4,000 4,000 Purchases 91,000 91,000 91,000 Purchases Returns and Allowances 1,000 1000 Freight In 225 225 225 Rent Expense 13,200 160 13,360 13360 Wages Expense 24,000 500 24,500 24500 Payroll Taxes Expense 3,324 38.25 3,362.25 3362.25 (31+7.25) Depreciation Expense—Store Equipment 3000 3,000 3000 Depreciation Expense—Office Equipment 1125 1,125 1125 Advertising Expense 0 0 Supplies Expense 140 140 140 Interest Expense 150 100 250 250 Total 220,875 220,875 37,063.25 37,063.25 223,638.25 222,638.25 137,162.25 158,970.00 72,366.00 72,366.00 Net income 21,807.75 (158970-all expenses) 158,970.00 158,970.00 If any doubt please commentRelated Questions
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