The Artisan Wines is a retail store selling balances below. All account balances

Question

The Artisan Wines is a retail store selling balances below. All account balances are normal 31, Tear Ended Deceaber 31 2019 talance Sheat 590.00 390.00 29,500.00 5,900.00 $90.00 C8o.00 4.00 900 00 590.00 Prepaid Advertising Supplies 340.00 245.00 3,350.00 1,090.00 145.00 12,900.00 12,900.00 15.90D.0 12 1s, 500 S, 900,00.250.00 2, 680.00 24,500,00 Equipeent 3,900.00 2.250.00 offiee Equipnent 1.590.00 24,500.00 3,605.00 2,480.00 24.500.00 3, cos.oo doe 2020 Mages 500.00 1 DD 7.25 rned Beninar 8,700.00S,800.00 2 ,900.00 2,900.00 122.30 0,810.00 30.810.00 15,010.00 15,010.00 15,010.00 Incone Sumary Sales s,900.00 12.900.00 15,900.00 162,970.00 15,900.00 12,900.00: 1 12.900.00 162,970.o0 162,970.00 5,800.00 s, 800.00 95,500.00 95,500.00 1,090.00 1,090.00 15.00 14,100.00 315.00 14,100.00 15.00 14,100.00 500.00 8.25 3,350.00 1,090.00 Wages Expense Payroll Taxes Expense 4,224.00 3,350.00 1,090.00 40.00 245.00 362-50 4,262.25 3.350.00 1,090.00 40.00 245.00 42.50 Interest Expense Totals $237,165.00 $237,165.00 $40,285-75 $40,285-7s $255,165.75 8255,165-75 $161,154.75 182,760.00 $94,011.00 $72,405-75 182,760.00 $182,760.00 $94,011.00 94,011.00 Required: L Prepare a classified income statement for the year ended December 31, 2019. The company does not classify its operating 2. Prepare a statement of owner's equity for the year ended December 31, 2019. No additional investments were made during the 3. Prepare a classified balance sheet as of December 31, 2019. Analyze What is the inventory turnover for Artisan Wines?

Explanation / Answer

Answer 1. ARTISAN WINES Income Statement For the Year Ended Dec 31, 2019 Operating Revenue Sales    162,970.00 Less: Sales Discount            290.00 Net Sales    162,680.00 Cost of Goods Sold Merchandise Inventory, Beginning      15,900.00 Purchases    95,500.00 Freight In          315.00 Delivered Cost of Purchases    95,815.00 Less: Purchase Returns & Allowances      1,090.00 Net Delivered Cost of Purchases      94,725.00 Goods Available For Sale    110,625.00 Less: Merchandise Inventory, Ending      12,900.00 Cost of Goods Sold      97,725.00 Gross Profit on Sales      64,955.00 Operating Expenses Rent Expense      14,100.00 Wages Expense      25,400.00 Payroll Taxes Expense        4,262.25 Depreciation Expense - Store Equipment        3,350.00 Depreciation Expense - Office Equipment        1,090.00 Advertising Expense            340.00 Supplies Expense            245.00 Total Operating Expenses      48,787.25 Income from Operations      16,167.75 Other Income Seminar Fee Income        5,800.00 Other Expenses Interest Expense            362.50 Net Non Operating Income        5,437.50 Net Income      21,605.25 Answer 2. ARTISAN WINES Statement of Owners' Equity For the Year Ended Dec 31, 2019 Vincent Arroyo, Capital, Beginning      30,810.00 Net Income    21,605.25 Less: Withdrawls for the Year    15,010.00 Increase in Capital        6,595.25 Vincent Arroyo, Capital, Ending      37,405.25 Answer 3. ARTISAN WINES Balance Sheet Dec 31, 2019 Assets Current Assets Cash      29,286.00 Accounts Receivable            590.00 Prepaid Advertising            680.00 Supplies            145.00 Merchandise Inventory      12,900.00 Total Current Assets      43,601.00 Plant & Equipment Store Equipment    29,500.00 Accumulated Depreciation - Store Equip.    (7,250.00)      22,250.00 Office Equipment      5,900.00 Accumulated Depreciation - Office Equip.    (2,680.00)        3,220.00 Total Plant & Equipment      25,470.00 Total Assets      69,071.00 Liabilities & Owners' Equity Liabilities Current Liabilities Notes Payable, Due 2020      24,500.00 Accounts Payable        3,605.00 Wages payable            500.00 Social Security Tax Payable              31.00 Medicare Tax Payable                 7.25 Unearned Seminar Fees        2,900.00 Interest Payable            122.50 Total Current Liabilities      31,665.75 Long Term Liabilities                     -   Total Liabilities      31,665.75 Owners' Equity Vincent Arroyo, Capital      37,405.25 Total Owners' Equity      37,405.25 Total Liabilities & Owners' Equity      69,071.00 Answer 4. Inventory Turnover = Cost of Goods Sold / Average Inventory Average Inventory = ($15,900 + $12,900) / 2 = $14,400 Inventory Turnover = $97,725 / $14,400 Inventory Turnover = 7.57558 or say 7.58 times (Approx.)

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