Question

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 Accounts Receivable Prepaid Advertising Supplies Merchandise Inventory Store Equipment Accumulated Depreciation-Store Equipment Office Equipment Accumulated Depreciation Office Equipment Notes Payable, due 2020 Accounts Payable Wages Payable Social Security Tax Payable Medicare Tax Payable Unearned Seminar Fees Interest Payable Vincent Arroyo, Capital Vincent Arroyo, Drawing Income Summary 15,900 25,900 3.989 5,909 1,950 29, eea 2,795 11,400 33.600 15.010 158,470 91,900 1.900 Sales Discounts Seminar Fee Income Purchases Purchases Returns and Allowances Freight In Rent Expense Wages Expense Payroll Taxes Expense Depreciation Expense-Store Equipment Depreciation Expense-Office Equipment Advertising Expense Supplies Expense Interest Expense 14,100 24,000 3,324 ADJUSTMENTS: a.-b. Merchandise inventory at December 31, 2019, was counted and determined to be $12.900. C. The amount recorded as prepaid advertising represents $1,020 paid on September 1, 2019. for 12 months of advertising d. The amount of supplies on hand at December 31 was $145. e. Depreciation on store equipment was $3,350 for 2019 f. Depreciation on office equipment was $1,225 for 2019. g. Unearned Seminar Fees represent $11.400 received on November 1, 2019. for six seminars. At December 31, four of these seminars had been conducted. h. Wages owed but not paid at December 31 were $500. 1. On December 31, 2019, the firm owed the employer's social security tax (53100) and Medicare tax (5725) 1. The note payable bears interest at 6% per annum. One month's interest is owed at December 31, 2019

Answer 1

Date Account title & explanation Debit Credit 39 2019 40 41 12900 93000 31-Dec Merchandise Inventory Cost of Goods Sold Merchandise Inventory Purchases (91900-1900) 15900 90000 43 340 45 46 31-Dec Advertising expense (1020/12*4) Prepaid Advertising 340 47 245 31-Dec Supplies expense (390 - 145) Supplies 49 245 51 3350 31-Dec Depreciation Expense - Store Equipment Accumulated Depreciation - Store Equipment 52 3350 54 1225 31-Dec Depreciation Expense - Office Equipment Accumulated Depreciation - Office Equipment 1225 7600 31-Dec Semiar Fees Income (11400/6*4) Unearned Seminar Fees 7600 59 60 500 31-Dec Wages Expense Wages Payable 61 500

3100 725 31-Dec Social Security Tax expense Medicare Tax expense Social Security Tax Payable Medicare Tax Payable 3100 725 68 145 31-Dec Interest Expense Interest Payable 69 145