The Wine Shop is a retail store selling vintage wines. On December 31, 2013, the firm’s general ledger contained the accounts and balances below. All account balances are normal.
Cash | 28,386 |
Accounts Receivable | 500 |
Prepaid Advertising | 480 |
Supplies | 300 |
Merchandise Inventory | 15,000 |
Store Equipment | 25,000 |
Accumulated Depreciation—Store Equipment | 3,000 |
Office Equipment | 5,000 |
Accumulated Depreciation—Office Equipment | 1,500 |
Notes Payable, due 2014 | 20,000 |
Accounts Payable | 2,705 |
Wages Payable |
|
Social Security Tax Payable |
|
Medicare Tax Payable |
|
Unearned Seminar Fees | 6,000 |
Interest Payable |
|
Vincent Arroyo, Capital | 32,700 |
Vincent Arroyo, Drawing | 14,110 |
Income Summary |
|
Sales | 153,970 |
Sales Discounts | 200 |
Seminar Fee Income |
|
Purchases | 91,000 |
Purchases Returns and Allowances | 1,000 |
Freight In | 225 |
Rent Expense | 13,200 |
Wages Expense | 24,000 |
Payroll Taxes Expense | 3,324 |
Depreciation Expense—Store Equipment |
|
Depreciation Expense—Office Equipment |
|
Advertising Expense |
|
Supplies Expense |
|
Interest Expense | 150 |
INSTRUCTIONS:
1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2013.
2. Enter the adjustments below in the Adjustments section of the worksheet. Identify each adjustment with the appropriate letter.
3. Complete the worksheet.
ADJUSTMENTS:
a.–b. Merchandise inventory at December 31, 2013, was counted, and determined to be $12,000.
c. The amount recorded as prepaid advertising represents $480 paid on September 1, 2013, for 12 months of advertising.
d. The amount of supplies on hand at December 31 was $100.
e. Depreciation on store equipment was $3,125 for 2013.
f. Depreciation on office equipment was $1,000 for 2013.
g. Unearned Seminar Fees represents $6,000 received on November 1, 2013, for six seminars. At December 31, two of these seminars had been conducted.
h. Wages owed but not paid at December 31 were $500.
i. On December 31, 2013, the firm owed the employer’s social securtity tax ($31.25) and Medicare tax ($7.25).
j. The note payable bears interest at 6% per annum. One month interest is owed at December 31, 2013.
Analyze: What was the amount of revenue earned by conducting seminars during the year ended December 31, 2013?
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