Question - Preparing Adjusting Entries and Closing Entries

Reference no: EM132649265

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

Required - Prepare a T account.

Reference no: EM132649265

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