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. 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

Answer 1