10:47 PM Thu Nov 30 2 TRANSACTIONS Check for $4,400 to pay Properties Management In the monthly rent Sighting contract with Cable State KILE $5.00 Check 602 to pay the full Received $520 for Megan Geing a credit in of her account Bed Check 60 for $17,320 to remit the sales tax owed for July through September to the State Tan Commission Bed Check 604 for $767340 to A Fahion State a cred in part of 9357 (57130) discount($15660) Sold mechada en cedit for $2.400 plus saint of $124 to Mariam Salib SS 24 + Bed Check 635 for $1,050 to BMX Supply Co. for supplies 4 Bed Check 606 for $3.594.60 to Unique Styles, a creditor in pofce5671 ($1.770), less cash discount Merchandising Business Accounting Cycle The Fashion Rack The Fashion Rack is a retail merchandising business that sells brand-name clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1, 20X1. This project will give you an opportunity to put your knowledge of accounting into practice as you handle the accounting work of The Fashion Rack during the month of October 201 INTRODUCTION The Fashion Rack has a monthly accounting period. The firm's chart of accounts is shown below. The journals used to record transactions are the sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Postings are made from the journals to the accounts receivable ledger, accounts payable ledger, and general ledger. The employees are paid at the end of the month. A computerized payroll service prepares all payroll records and checks. Collected $1.70000 on account from Ave Trish, a credit customer dams of handse free Mariam Salb. The a October 3 Crede Memoranda 11 for S Bed Check 607 for $1,666 to Classy Threads, a credit in pest of ice 3292 ($1,700), cash (34) Had of $1.600 plus sales tax of $930 October 1- Recened a check from James Heiner a condecor for $132 te per the balance he owes Bed Check 60 for $1.004 to deposit social security tax (702) Medicare (162) and federal income ta withheld (1020) from the September at Read this check in the cash payments journal Sold had need for $2.000 plus sales of $102.50 to Maldonade Sales Sp242 10 12 Check 609 for $1.525 to pay The Daily News for a paper appeared in October Purchased merchandise for $4.120 from A Fashion Sutement Boice 9422, dated October 3, the 2/10/30 Bed Checks for $33 preight changes to Ace Fight Coping company that dri chando from A Face Stunt on September 27 and October 1 Had of $3,200 plus sales tax of $6600 ring October 1-13 15 Sold mechado en cedit for $1540 piks sales of 97 so James Hri Sains Sp 243 16 Purchased discontinued merchandise from Acme Jobbers, paid for it immediately with Check 611 for $5,120. Received $510 on account from Mariam Salib, a credit customer. Issued Check 612 for $4,723.60 to A Fashion Statement, a creditor, in payment of Invoice 9422 ($4,820.00), less cash discount ($96.40) 18 Issued Check 613 for $7,400 to Teresa Lojay as a withdrawal for personal use. Had cash sales of $13,500 plus sales tax of $675 during October 15-20. 22 Issued Check 614 to City Utilities for $1,492 to pay the monthly electric bill 24 Sold merchandise on credit for $820 plus sales tax of $41 to Megan Greening, Sales Slip 244. 25 Purchased merchandise for $3,580 from Classy Threads, Invoice 3418, dated October 23; the terms are 2/10, 1/30. INSTRUCTIONS 1. Open the general ledger accounts and enter the balances for October 1, 20XI. Obtain the necessary figures from the postclosing trial balance prepared on September 30, 20X1, which is shown below. (If you are using the Study Guide & Working Papers, you will find that the general ledger accounts are already open.) 2. Open the subsidiary ledger accounts and enter the balances for October 1, 20X1. Obtain the necessary figures from the schedule of accounts payable and schedule of accounts receivable prepared on September 30, 20X1, which appears below. (If you are using the Study Guide & Working Papers, you will find that the subsidiary ledger accounts are already open.) 3. Analyze the transactions for October and record each transaction in the proper journal. (Use 10 as the number for the first page of each special journal and 16 as the number for the first page of the general journal.) 4. Post the individual entries that involve customer and creditor accounts from the journals to the subsidiary ledgers on a daily basis. Post the individual entries that appear in the general journal and in the Other Accounts sections of the cash receipts and cash payments journals to the general ledger on a daily basis. 5. Total, prove, and rule the special journals as of October 31, 20X1. 27 29 Issued Check 615 to Regional Telephone for $940 to pay the monthly telephone bill. Had cash sales of $14,240 plus sales tax of $712 during October 22-27. Received Credit Memorandum 175 for $-130 from Classy Threads for defective goods that were returned. The original purchase was recorded on October 25. Sold merchandise on credit for $3,450 plus sales tax of $172.50 to Amy Trinh, Sales Slip 245 Recorded the October payroll. The records prepared by the payroll service show the following totals: earnings, $10,500; social security, $702.00; Medicare, $162.00; income tax, $1,020; and net pay $3,916. The excess withholdings corrected an error made in withholdings in September Recorded the employer's payroll taxes, which were calculated by the payroll service social security, $702, Medicare, $162. federal unemployment tax, $118; and state unemployment tax, $584. This, too, reflects an understatement of taxes recorded in September and corrected in this month Purchased merchandise for $4,000 from Unique Styles, Invoice 5321, dated October 26; the terms are 1/10, n/30. 30 31 Issued Checks 616 through 619, totaling $3,916.00, to employees to pay October payroll. For the sake of simplicity, enter the total of the cheeks on a single line in the cash payments journal 31 Issued Check 620 for $525 to A+ Janitors for October janitorial services Had cash sales of $1,800 plus sales tax of $90 for October 29-31. 6. Post the column totals from the special journals to the general ledger accounts 101 Cash Accounts Receivable The Fashion Rack Chart of Accounts Revennes 401 Sales in millions) Total Current Assets 402 Sales Returns and Allowances Total Assets 121 Merchandise Inventory 112 Allowance for Doubtful Accounts Cost of Goods Sold 501 Purchases 502 Freight 133 Prepaid Insurance 503 Purchases Returns and Allowances " Total Current Liabilities Totol Liabilities Consolidated Balance Sheet November 30 2018 2017 $1,479.9 $1,617.0 $10,256.4 $10,385.8 $2.001.7 $1,947.3 $7,074.2 $7.814.9 135 Prepaid Advertising 141 Equipment 504 Purchases D Expenses 142 Accumulated Depreciation-Equipment 611 Advertising Expense Lialities 203 Accounts Payable 221 Social Security Tax Payable 222 Medicare Tax Payable 223 Employee Income Tax Payable 225 Federal Unemployment Tax Payable 227 State Unemployment Tax Payable 229 Salaries Payable 231 Sales Tan Parable Owner's Equity 301 Teresa Loja Capital 102 Teresa Lejay Drawin 199 Income Summary 614 Depreciation Expense-Equipment 617 Insurance Expense ACCOUNT NAME Cash 620 Uncollectible Accounts Expense Accounts Receivable 623 Janitorial Services Expense 626 Payroll Taxes Expense 629 Rest Expense 632 Salaries Expense 635 Supplies Expense 644 Usities Expense The Fashion Rack Postclosing Trial Balance September 30, 20x1 59 800 00 621000 Allowance for Doubtful Accounts 420 00 Merchandise Inventory 889 9600 Supplies 410000 Prepaid Insurance 8400 00 Equipment 8300000 Accumulated Depreciation-Equipment Accounts Payable 705000 1830000 70200 16200 102000 $12.00 1268 00 638 Telephone Expense Social Security Tax Payable Medicare Tax Payable Employee Income Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Sales Tax Payable Teresa Lajoy, Capita Totals 2505 06 00 203 25 200 A Fashion Statement Classy Threads Unique Styles Total 7. Check the of the amble dryingers by preparing a ache of and schedule of October 31, 201 Compare the with the bales of the Ace Recebe accost and the Account Paste at the Check the of the aller bearing table in the first two columns of a come worksheet. Make sure that Completes section of the work Use the flowing day each with the appropriate ter Dhe firm had set credit sales of $10,140 From experience with similar businesses, the previous b 10 of ther's would be pected from for the month of October Obventory of the apples showed that costing $2.40 hand ordnadjent for the 1-1 Seber 30, 2000, the phased the policy for $0.400 Receed an adjust for the expired Ober, 2001, the for 55,300 with a local lesions and pod the full amount in advance Bond affo On April 1, 2001, the bad for $3,000 The wasted to be a life of years and of $12.500 Record na fordion on the equipment for 18. Come True of the 11. Detector October and complete the worksheet 12. Predict for the month Oct 31, 2001 (The firm does not ide its operating expenses ite 13. Pof's for the other 200 1. 21. 2001. 15. the adjectives wing great journal page 17 Ashley Butler Megan Greening James Helmer Emma Maldonado Jim Price Mariam Salib Amy Trinh Total The Fashion Rack Schedule of Accounts Payable September 30, 20X1 The Fashion Rack Schedule of Accounts Receivable September 30, 20X1 7830 00 1700 00 8770 00 18300 00 795 00 520 00 832 00 232 00 162100 510 00 1700 00 6210 00 Notes on questions ** What was the dollar amount and percentage of the changes? What is the impact to the business from the balance sheet? b) What was the dollar amount and percentage of the changes? What is the impact to the business from cash and account receivable? c) Fun Part! What happened? What does it all mean? What should we do differently or more of? Yay financial analysis! Only looking for a paragraph or two. Interested to see your opinions. 32%