Financial Statements and Closing Procedures CHAPTER 13 499 Mini-Practice Set 2 Merchandising Business Accounting Cycle The Fashion Rack The Fashion Rack is a retait merchandising bwsiness that selts brand-name clothing at discown prices. The firm is oned and managed by Teresa Lojay, who started the business on April 1, 2019 This project will give you an opportuniry to pur your knowledge of accounring into pracrice as you handle the accounzing work of The Fashion Rack during the month of October 2019 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 joarnal, purchases jourmal, cash receipts jour- nal, cash payments journal, and general journal. Postings are made from the journals to the accounts receivable ledger, accounts payable ledger, and general ledger. The employces are paid at the end of the month. A computerized payroll service prepares all payroll records and checks. I. Open the general ledger accounts and enter the balances for October 1, 2019. Obtain the nec- INSTRUCTIONS essary figures from the postclosing trial balance prepared on September 30, 2019, which is shown below. (If you are using the Study Guide & Wonking Papers, you will find that the gen- eral ledger accounts are already open.) 2. Open the subsidiary ledger accounts and enter the balances for October 1, 2019. Obtain the necessary figures from the schedule of accounts payable and schedule of accounts receivable prepared on September 30, 2019, which appears below. (Tf you are using the Study Guide & Working Papers, you will find that the subsidiary ledger accounts are already open.) 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.) 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 gen eral ledger on a daily basis. 3. 4. 5. Total, prove, and rule the special journals as of October 31. 2019. 6. Post the column totals from the special journals to the general ledger accounts The Fashion Rack Chart of Accounts Assets 101 Cash 111 Accounts Receivable 112 Allowance for Doubtful Accounts 121 Merchandise Inventory 131 Supplies 133 Prepaid Insurance 135 Prepaid Advertising 141 Equipment Liabilities 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 Tax Payable 142 Accumulated Depreciation-Equipment Financial Statements and Closing Procedures CHAPTER 13 499 Mini-Practice Set 2 Merchandising Business Accounting Cycle The Fashion Rack The Fashion Rack is a retait merchandising bwsiness that selts brand-name clothing at discown prices. The firm is oned and managed by Teresa Lojay, who started the business on April 1, 2019 This project will give you an opportuniry to pur your knowledge of accounring into pracrice as you handle the accounzing work of The Fashion Rack during the month of October 2019 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 joarnal, purchases jourmal, cash receipts jour- nal, cash payments journal, and general journal. Postings are made from the journals to the accounts receivable ledger, accounts payable ledger, and general ledger. The employces are paid at the end of the month. A computerized payroll service prepares all payroll records and checks. I. Open the general ledger accounts and enter the balances for October 1, 2019. Obtain the nec- INSTRUCTIONS essary figures from the postclosing trial balance prepared on September 30, 2019, which is shown below. (If you are using the Study Guide & Wonking Papers, you will find that the gen- eral ledger accounts are already open.) 2. Open the subsidiary ledger accounts and enter the balances for October 1, 2019. Obtain the necessary figures from the schedule of accounts payable and schedule of accounts receivable prepared on September 30, 2019, which appears below. (Tf you are using the Study Guide & Working Papers, you will find that the subsidiary ledger accounts are already open.) 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.) 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 gen eral ledger on a daily basis. 3. 4. 5. Total, prove, and rule the special journals as of October 31. 2019. 6. Post the column totals from the special journals to the general ledger accounts The Fashion Rack Chart of Accounts Assets 101 Cash 111 Accounts Receivable 112 Allowance for Doubtful Accounts 121 Merchandise Inventory 131 Supplies 133 Prepaid Insurance 135 Prepaid Advertising 141 Equipment Liabilities 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 Tax Payable 142 Accumulated Depreciation-Equipment