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 $128,348 in 2014; all sales were cash sales.
2. Inventory purchases total $67,056 in 2014; at December 31, 2014, inventory totals $12,760. Assume all purchases are made on account.
3. Accounts payable totals $3,608 at December 31, 2014.
4. Annual store rent for $21,120 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 $11,000 cash for wages. At December 31, 2014, Fischer owed employees unpaid and unrecorded wages of $308.
6. Depreciation on equipment totals $1,496 in 2014.

Fischer Card Shop Balance Sheet December 31, 2013
Cash		$7,480	Accounts payable	$4,576
Inventories		10,560	Wages payable	88
Prepaid rent		3,344	Total current liabilities	4,664
Total current assets		21,384	Total equity (includes retained earnings)	20,680
Equipment	$6,600		Total liabilities and equity	$25,344
Less Accumulated depreciation	2,640
Equipment, net		3,960
Total assets		$25,344

(a) Prepare any 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

for formulas and calculations, refer to the images below -