Question

Fischer Card Shop is a small retail shop. Fischer's balance sheet at year-end 2014 is as follows. The following information details transactions and adjustments that occurred during 2015.

1. Sales total $145,850 in 2015; all sales were cash sales.
2. Inventory purchases total $76,200 in 2015; at December 31, 2015, inventory totals $14,500. Assume all purchases are made on account.
3. Accounts payable totals $4,100 at December 31, 2015.
4. Annual store rent for $24,000 and was paid on March 1, 2015, covering the next 12 months. The balance in prepaid rent at December 31, 2014, was the balance remaining from the advance rent payment in 2014.
5. Wages are paid every other week on Friday; during 2015, Fischer paid $12,500 cash for wages. At December 31, 2015, Fischer owed employees unpaid and unrecorded wages of $350.
6. Depreciation on equipment totals $1,700 in 2015.

(c) Set up T-accounts, including beginning balances, and post the journal entries to those T-accounts on the appropriate line.
After all transactions are recorded, compute the balance for each account in the appropriate column.

Fischer Card Shop Balance Sheet December 31, 2014
Cash		$8,500	Accounts payable	$5,200
Inventories		12,000	Wages payable	100
Prepaid rent		3,800	Total current liabilities	5,300
Total current assets		24,300	Total equity (includes retained earnings)	23,500
Equipment	$7,500		Total liabilities and equity	$28,800
Less Accumulated depreciation	3,000
Equipment, net		4,500
Total assets		$28,800

Answer 1

  solution ; Following are the T account of entries

   sales /c   

Date	Particulars	Amount	Date	Particular	Amount
Dec 2015	To bal c/d	145850	Dec 2015	By cash a/c	145850
		145850			145850

   Inventory a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To bal c/d	12000	Dec2015	By cost of goods sold	73700
Dec 2015	To Account Payable a/c	76200	Dec 2015	By bal c/d	14500
		88200			88200

   Account Payable a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To cash a/c	77300	Dec 2015	By bal c/d	5200
Dec 2015	To bal c/d	4100	Dec 2015	By purchase a/c	76200
		81400			81400

   Shop Rent a/c

Date	Particulr	Amount	Date	Particular	Amount
Dec2015	To cash a/c	20000	Dec 2015	By bal c/d	24000
Dec2015	To Prepaid Rent a/c	3800
Dec 2015	To outstanding rent a/c	200
		24000			24000

   Prepaid shop rent a/c   

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To bal b/d	3800	Dec 2015	By rent a/c	3800
Dec 2015	To cash a/c	4000	Dec 2015	By bal c/d	4000
		7800			7800

   Shop Rent outstanding a/c

Date	Particular	Amount	Date	Particular	AMOUNT
Dec2015	To bal c/d	200	Dec 2015	By Rent a/c	200
Total		200			200

   wages a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To cash a/c	12500	Dec 2015
Dec 2015	To wages outstanding a/c	350	Dec 2015	By bal c/d	12850
Total		12850			12850

   wage outstanding a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To cash a/c	100	Dec 2015	By bal b/d	100
Dec 2015	To bal c/d	350	Dec 2015	By wages a/c	350
Total		450			450

   Depreciation a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To Equipment a/c	1700
			Dec 2015	By bal c/d	1700
Total		1700			1700

   cash a/c

Date	Particular	Amount	Date	Particular	Amount
Dec 2015	To bal b/d	8500
Dec 2015	To sale a/c	145850	Dec 2015	By Account Payable a/c	77300
			Dec 2015	By Shop Rent a/c	20000
			Dec 2015	By Prepaid shop Rent a/c	4000
			Dec 2015	By wages a/c	12500
			Dec 2015	By wages out standing a/c	100
			Dec 2015	By bal c/d	40450
Total		154350			154350

   Journl entries

Date	Particular	Dr	Cr
Dec 2015	cash a/c    To sales ( being goods are sold on credit)	145850	145850
	Inventory a/c    To Account Payable ( being inventory purchase on credit)	76200	76200
	cost of goods sold    To inventory (Being cost of inventory sold	73700	73700
	Account Payable    To cash a/c ( Being payment made to account payable )	77300	77300
	Shop rent    To cash    To prepaid rent    To rent outstanding ( Being shop rent charge for the year by paying in cash and adjusted against prepaid rent and rest is outstanding)	24000	20000 3800 200
	Prepaid rent    To cash    To rent (Being rent prepaid and last year prepaid rent is adjusted)	7800	4000 3800
	wages a/c    To wages outstanding a/c    To cash a/c (Being wages charge during the year)	12850	350 12500
	Wages outstanding    To cash a/c (Being wages outstanding paid)	100	100
	Depericiation    To euipment ( being equipment depriciated)	1750	1750