Fit & Fashionable is mainly a wholesaler of fitness equipment and apparel, strategically located in Coconut Grove, FL. The clientele of Fit & Fashionable consists primarily of local gyms, wellness centers, retail outlets of sports equipment and apparel, and the general public. Fit & Fashionable is owned and operated by Marty Chavez. You are employed to maintain the accounts and prepare financial statements for Fit & Fashionable. This practice set includes the transactions completed during April, which are intended to illustrate general principles of accounting rather than the techniques of the accounting system of a particular business. You are to analyze, record, and post these transactions for April. You will then journalize entries for accounts requiring adjustment, prepare month-end financial reports, and complete the closing process. The information below contains a description of the contents of the practice set and instructions for completing the project manually. The practice set can also be completed utilizing the Cengage Learning General Ledger (CLGL) software, which is available online at CengageBrain.com. Instructions for using this general ledger software are provided on pages 35. BOOKS OF ACCOUNT Journals The following journals are included in this booklet: 1. General Journal 2. Revenue Journal (also called a Sales Journal) 3. Purchases Journal 4. Cash Receipts Journal 5. Cash Payments Journal A complete chart of accounts and a complete list of all customers and creditors are provided on the inside front cover of Booklet 2. In the general ledger, all accounts have been opened and the account balances as of April 1, the beginning of a new fiscal period, have been entered. In the accounts receivable ledger and the accounts payable ledger, all accounts have been opened and all amounts due or owed are shown. MANUAL INSTRUCTIONS This practice set is designed to be used with the business forms and/or with the Narrative of Transactions, both of which may be found in booklet 3.Journalizing Transactions The business forms are the source of information regarding the transactions and are the basis for the journal entries. Open Booklet 3 and follow the instructions contained in it. Using the business forms and/or the narrative, begin journalizing the transactions. (Note: Post daily to the subsidiary ledgers.) Posting to the General Ledger 1. Total each column of the various special journals. Ensure that total debits equal total credits in each journal. 2. Post all items that need to be posted individually to the general ledger. The general ledger account balances do not need to be determined until the posting is completed. Use the printed page numbers in your posting references. 3. Post the appropriate totals in the special journals to their respective accounts in the general ledger. Determine the balance of each account. The cash balance on April 30 should be $146,131.01. Month-End Processing Since the proprietor, Marty Chavez, considers each month to be a separate fiscal period, you must now complete month-end processing. Ruled forms are provided for the trial balance, schedules, and financial statements. A work sheet is provided, and its use is optional. The heading, with the exception of the date line, is printed on each form. Also, all general ledger account titles are printed on the work sheet. 1. Prepare schedules of accounts receivable and accounts payable, and compare the totals with the balances of the controlling accounts in the general ledger. 2. Prepare a trial balance at April 30. (Completing the work sheet is optional.) 3. Make necessary adjustments. Record adjusting entries on page 6 of the general journal. Adjustment data are as follows: a) Inventory per physical count, April 30 ................................ $208,554.75 b) Office supplies on hand at April 30 ..................................... 1,600.00 c) Store supplies on hand at April 30....................................... 3,005.00 d) Prepaid Insurance: Transfer 1/12 of the premium paid on April 2 to expense. Depreciation for the month: e) Equipment ........................................................ 1,250.00 f) Building ........................................................... 2,475.00 g) Interest earned on note receivable ....................................... 30.00 h) Accrued salaries at April 30: Sales salaries .................................................... 1,200.00 Office salaries .................................................. 500.00 Record the estimate of customer returns of this months sales: i) Customer refunds ............................................. 4,470.00 (debit Sales, credit Customer Refunds Payable) j) Returns inventory............................................. 3,190.00 (debit Estimated Returns Inventory, credit Cost of Goods Sold).4. Prepare an income statement, a statement of owners equity, and a balance sheet. 5. Journalize the adjusting entries and post to the general ledger. 6. Journalize the closing entries on page 7 of the general journal. Post to the general ledger, indicating closed accounts by inserting a horizontal line in both balance columns. 7. Prepare a post-closing trial balance. Fit & Fashionable 800 Coco Drive, Coconut Grove, FL 33133 NARRATIVE OF TRANSACTIONS Record the following transactions in the appropriate journals. April 1 Purchased merchandise on account from Alexus Fitness Connection, $13,865.00. Terms are n/30. 1 Sold merchandise on account, Invoice No. 301, to Miami Health Club for the net amount of $5,301.60. The Cost of Goods Sold is $3,864.00. Credit terms for all sales on account are 2/10, n/30. Credit sales are recorded net of the 2% discount assuming customers will take the discount. Fit & Fashionable uses a perpetual inventory system and therefore records the cost of goods sold as well as the sale. 1 Issued Check No. 2201 for $14,268.80 to Alexus Fitness Connection in payment of its invoice of March 6. 2 Received a check for $14,406.00 from Body Excellence Fitness Club in payment of our invoice of March 27 for $14,700.00, less discount. 2 Issued Check No. 2202 for $5,700.00 to Harvey Insurance Company as a prepayment of insurance month policy. for a 12-3 Issued Check No. 2203 for $46,480.00 to Fizzy-Cal Network in payment of its invoice of March 7 (no discount). 3 Sold merchandise on account, Invoice No. 302, to All Access Fitness Center for the net amount of $9,364.29. The Cost of Goods Sold is $6,825.00. 3 Received a check from Corys Gym in the Grove for $12,348.00 in payment of our invoice of March 27. 65 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. April 4 Issued Check No. 2204 for $14,000.00 to HeartFit Enterprises in payment of its invoice of March 28. 4 Received a check for $6,174.00 from The Sun Set Recreation Center in payment of our invoice of March 8. 5 Sold merchandise on account, Invoice No. 303, to Westwood Boxing Gym for the net amount of $27,306.48. The Cost of Goods Sold is $19,903.68. 5 Purchased merchandise from 6 Cash on $49,519.75. Terms are n/30.6 Cash on $49,519.75. Terms are n/30. sales for April account Sports Magic Warehouse, 16 were $26,600.00. The Cost of Goods Sold is $18,024.00. Reminder: Record the following separate deposits in the register: the $26,600.00 of cash sales and the total of the checks received as payments on account this week. 8 Received a check for $8,232.00 from Westwood Boxing Gym in payment of our invoice of March 29 for $8,400.00, less discount. 8 Purchased merchandise on account from Fit & Fab Health Products, $5,230.00, terms 2/10, n/30. Record this purchase net of the discount. 8 Sold merchandise on account, Invoice No. 304, to The Sun Set Recreation Center for the net $21,756.88. The Cost of Goods Sold is $15,858.00.April 8 Received a check for $10,976.00 from Pine Bay Fitness Club in payment of our invoice of March 30. 9 Purchased the following on account from Fizzy-Cal Network: display (charge to Store Supplies), $1,800.00; merchandise, $9,600.00. $11,400.00. Terms are n/30. Total: 9 Issued Credit Memorandum No. 107 to The Sun Set Recreation Center for merchandise returned on Invoice No. 304 of April 8 for the discounted price of $823.20. The Cost of Goods Sold is $600.00. 10 Issued Check No. 2205 for $175.00 to Marty Chavez for customer entertain-ment (charge to Miscellaneous Selling Expense). 10 Sold merchandise on account, Invoice No. 305, to Rockdale Gym for the net amount of $13,373.86. The Cost of Goods Sold is $9,412.00. 11 Received Credit Memorandum No. 432 from Fit & Fab Health Products for merchandise returned, $875.00. Record this return net of the discount, $857.50.11 Received a check for $300.00 from SupplyMax for return of store supplies that were originally purchased for cash. 11 Received a check for $5,301.60 from Miami Health Club in payment of Invoice No. 301. 12 Received a check for $9,364.29 from All Access Fitness Center in payment of Invoice No. 302. 13 Issued Check No. 2206 for $13,000.00 to Payroll for biweekly salaries: sales salaries, $8,000.00; office salaries, $5,000.00. 13 Cash sales for April 813 were $36,120.00. The Cost of Goods Sold is $24,910.80.April 15 Received a check for $27,306.48 from Westwood Boxing Gym in payment of Invoice No. 303.