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.

Artisan Wines Worksheet Year Ended December 31, 2019
		Trial Balance						Adjustments						Adjusted Trial Balance						Income Statement						Balance Sheet
Account Name		Debit			Credit			Debit			Credit			Debit			Credit			Debit			Credit			Debit			Credit
Cash	$	28,386.00											$	28,386.00											$	28,386.00
Accounts Receivable		500.00												500.00												500.00
Prepaid Advertising		480.00									160.00			320.00												320.00
Supplies		300.00									140.00			160.00												160.00
Merchandise Inventory		15,000.00						13,000.00			15,000.00			13,000.00												13,000.00
Store Equipment		25,000.00												25,000.00												25,000.00
Accumulated Depreciation—Store Equipment					3,000.00						3,000.00						6,000.00												6,000.00
Office Equipment		5,000.00												5,000.00												5,000.00
Accumulated Depreciation—Office Equipment					1,500.00						1,125.00						2,625.00												2,625.00
Notes Payable, due 2020					20,000.00												20,000.00												20,000.00
Accounts Payable					2,705.00												2,705.00												2,705.00
Wages Payable											500.00						500.00												500.00
Social Security Tax Payable											31.00						31.00												31.00
Medicare Tax Payable											7.25						7.25												7.25
Unearned Seminar Fees					6,000.00			4,000.00									2,000.00												2,000.00
Interest Payable											100.00						100.00												100.00
Vincent Arroyo, Capital					32,700.00												32,700.00												32,700.00
Vincent Arroyo, Drawing		14,110.00												14,110.00												14,110.00
Income Summary								15,000.00			13,000.00			15,000.00			13,000.00			15,000.00			13,000.00
Sales					153,970.00												153,970.00						153,970.00
Sales Discounts		200.00												200.00						200.00
Seminar Fee Income											4,000.00						4,000.00						4,000.00
Purchases		91,000.00												91,000.00						91,000.00
Purchases Returns and Allowances					1,000.00												1,000.00						1,000.00
Freight In		225.00												225.00						225.00
Rent Expense		13,200.00												13,200.00						13,200.00
Wages Expense		24,000.00						500.00						24,500.00						24,500.00
Payroll Taxes Expense		3,324.00						38.25						3,362.25						3,362.25
Depreciation Expense—Store Equipment								3,000.00						3,000.00						3,000.00
Depreciation Expense—Office Equipment								1,125.00						1,125.00						1,125.00
Advertising Expense								160.00						160.00						160.00
Supplies Expense								140.00						140.00						140.00
Interest Expense		150.00						100.00						250.00						250.00
Totals	$	220,875.00		$	220,875.00		$	37,063.25		$	37,063.25		$	238,638.25		$	238,638.25		$	152,162.25		$	171,970.00		$	86,476.00		$	66,668.25
Net Income																				19,807.75									19,807.75
																			$	171,970.00		$	171,970.00		$	86,476.00		$	86,476.00

Required:

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.

Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the year.

Prepare a classified balance sheet as of December 31, 2019.

Analyze:
What is the inventory turnover for Artisan Wines?

Answer 1