Help Save&ExitSubmit; The Artisan Wines is a retail store selling vintage wines.
ID: 2399568 • Letter: H
Question
Help Save&ExitSubmit; 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. Artiaan Nines rear Ended Decesber 31, 2019 djustaent djuated Trial Balanoe Iscone Stat Debit 28,386.DD 8 28,386-. Accounts Receirable Prepald Advertising Bupplien Merehandise Investory Store gaipnent s0a.ag 300.00 15,000.0 25,000.9 13,000.0 15,000 13,DDD.00 3,000.00 1,125.0 office Tquipment ecunalated Depreciation-Office Equipsent Notes Payable, due 2020 Accounta Payable Mages rayable Bocial Beeurity Tax Payable 5, 00d.ad 5,000.D0 5DD.0 2,625.0 2, 705.00 2,703.0 Unesrned Seniasar Fees Interest Payable vincent Arroya, Capital Vineent Aroyo, Drawing Inoone 8unsary 2, doo.sa 32,700.00 15, 00-00 13,008-40 15.000.00 13,009.00 aa.00 32,700.00 14,110.00 14.: 15,oDa.0013, 030.00 153,570.0 153,978.D 4,000.00 4.400.00 91,000.00 225,00 24,000,00 1, DDD.04 PuzchaSE Returna and Allovanees Preight In Rent Expenas 13,200.0? 13,200.0? 500.00 3, 324.DD Payroll Taxes Zxpsns Depreeiation Expense-6tore Egeipmunt Deprsciation Expenss-offlee Equipeent Advertising ExpenaExplanation / Answer
Answer 1. ARTISAN WINES Income Statement For the Year Ended Dec 31, 2019 Operating Revenue Sales 153,970.00 Less: Sales Discount 200.00 Net Sales 153,770.00 Cost of Goods Sold Merchandise Inventory, Beginning 15,000.00 Purchases 91,000.00 Freight In 225.00 Delivered Cost of Purchases 91,225.00 Less: Purchase Returns & Allowances 1,000.00 Net Delivered Cost of Purchases 90,225.00 Goods Available For Sale 105,225.00 Less: Merchandise Inventory, Ending 13,000.00 Cost of Goods Sold 92,225.00 Gross Profit on Sales 61,545.00 Operating Expenses Rent Expense 13,200.00 Wages Expense 24,500.00 Payroll Taxes Expense 3,362.25 Depreciation Expense - Store Equipment 3,000.00 Depreciation Expense - Office Equipment 1,125.00 Advertising Expense 160.00 Supplies Expense 140.00 Total Operating Expenses 45,487.25 Income from Operations 16,057.75 Other Income Seminar Fee Income 4,000.00 Other Expenses Interest Expense 250.00 Net Non Operating Income 3,750.00 Net Income 19,807.75 Answer 2. ARTISAN WINES Statement of Owners' Equity For the Year Ended Dec 31, 2019 Vincent Arroyo, Capital, Beginning 32,700.00 Net Income 19,807.75 Less: Withdrawls for the Year 14,110.00 Increase in Capital 5,697.75 Vincent Arroyo, Capital, Ending 38,397.75 Answer 3. ARTISAN WINES Balance Sheet Dec 31, 2019 Assets Current Assets Cash 28,386.00 Accounts Receivable 500.00 Prepaid Advertising 320.00 Supplies 160.00 Merchandise Inventory 13,000.00 Total Current Assets 42,366.00 Plant & Equipment Store Equipment 25,000.00 Accumulated Depreciation - Store Equip. (6,000.00) 19,000.00 Office Equipment 5,000.00 Accumulated Depreciation - Office Equip. (2,625.00) 2,375.00 Total Plant & Equipment 21,375.00 Total Assets 63,741.00 Liabilities & Owners' Equity Liabilities Current Liabilities Notes Payable, Due 2020 20,000.00 Accounts Payable 2,705.00 Wages payable 500.00 Social Security Tax Payable 31.00 Medicare Tax Payable 7.25 Unearned Seminar Fees 2,000.00 Interest Payable 100.00 Total Current Liabilities 25,343.25 Long Term Liabilities - Total Liabilities 25,343.25 Owners' Equity Vincent Arroyo, Capital 38,397.75 Total Owners' Equity 38,397.75 Total Liabilities & Owners' Equity 63,741.00 Answer 4. Inventory Turnover = Cost of Goods Sold / Average Inventory Average Inventory = ($15,000 + $13,000) / 2 = $14,000 Inventory Turnover = $92,225 / $14,000 Inventory Turnover = 6.5875 or say 6.59 times (Approx.)
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