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?

Answer 1

	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 comment

Revenue earned by consucting seminar is $4000