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journalizing this entries, and doing the closing entries too. thank you so much! Financial Statements end Clesing Procd in Mini-Practice Set 2 Merchandising Business Accounting
journalizing this entries, and doing the closing entries too.
thank you so much!
Financial Statements end Clesing Procd in Mini-Practice Set 2 Merchandising Business Accounting Cycle The Fashion Rack The Fashion Rack is a retail merchandising business that sells brand-name clothing at discown prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1, 2019 7his 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 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 journal, purchases journal, 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 employees are paid at the end of the month. A computerized payroll service prepares all payroll records and checks 1. Open the general ledger accounts and enter the balances for October 1, 2019. Obtain the nec- essary figures from the postclosing trial balance prepared on September 30, 2019, which is shown below. (If you are using the Study Guide & Working 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 helow, (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 general journal. (Use 16 as the number for the first page of the general journal.) 4. Post the individual entries from the general journal to the general ledger and subsidiary ledgers. 5. Check the accuracy of the subsidiary ledgers by preparing a schedule of accounts receivable and a schedule of accounts payable as of October 31, 2019. Compare the totals with the balances of the Accounts Receivable account and the Accounts Payable account in the general ledger The Fashion Rack Chart of Accounts Liabilities Assets Accounts Payable 203 Cash 101 Social Security Tax Payable 221 Accounts Receivable 111 Medicare Tax Payable 222 Allowance for Doubtful Accounts 112 Employee Income Tax Payable 223 Merchandise Inventory 121 Federal Unemployment Tax Payable 225 Supplies 131 State Unemployment Tax Payable 227 Prepaid Insurance 133 Salaries Payable 229 Prepaid Advertising 135 Sales Tax Payable 231 Equipment 141 Accumulated Depreciation-Equipment 142 TRANSACTIONS DATE Issued Check 601 for $4,200 to pay City Properties the monthly rent Oct. Signed a three-month radio advertising contract with Cable Station KOTU for $4.8co 1 issued Check 602 to pay the full amount in advance. Received $520 from Megan Greening, a credit customer, in payment cof her account 2 Issued Check 603 for $17,820 to remit the sales tax owed for July through 2 September to the State Tax Commission. Issued Check 604 for $7,673.40 to A Fashion Statement, a creditor, in payment of Invoice 9387 ($7,830), less a cash discount ($156.60) 2 Sold merchandise on credit for $2,480 plus sales tax of $124 to Dimitri Sayegh, Sales Slip 241 Issued Check 605 for $1,050 to BMX Supply Co. for supplies. 4 Issued Check 606 for $8,594.60 to Today's Woman, a creditor, in payment of Invoice 5671 ($8,770), less a cash discount ($175.40). 4 Collected $1,700.00 on account from Emily Tran, a credit customer. Accepted a return of merchandise from Dimitri Sayegh. The merchandise was origi nally sold on Sales Slip 241, dated October 3; issued Credit Memorandum 18 for $630, which includes sales tax of $30. 5 Issued Check 607 for $1,666 to Classy Threads, a creditor, in payment of Invoice 3292 ($1,700), less a cash discount ($34). 5 Had cash sales of $18,600 plus sales tax of $930 during October 1-6 6 Received a check from James Helmer, a credit customer, for $832 to pay the balance 8 he owes. Issued Check 608 for $1,884 to deposit social security tax ($702), Medicare tax ($162), and federal income tax withholding ($1,020) from the September payroll 8 Sold merchandise on credit for $2,050 plus sales tax of $102.50 to Emma Maldonado, Sales Slip 242 Issued Check 609 for $1,445 to pay The City Daily for a newspaper advertisement that appeared in October. 10 Purchased merchandise for $4,820 from A Fashion Statement, Invoice 9422, dated 11 October 8; the terms are 2/10, n/30. Issued Check 610 for $375 to pay freight charges to Ace Freight Company, the truck ing company that delivered merchandise from A Fashion Statement on September 27 and October 11 Had cash sales of $12,300 plus sales tax of $615 during October 8-13. 13 Sold merchandise on credit for $1,940 plus sales tax of $97 to James Helmer, Sales Slip 243. 15 Purchased discontinued merchandise from Acme Jobbers; paid for it immediately with Check 611 for $6,420. 16 Received $510 on account from Dimitri Sayegh, a credit customer. 16 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). 16 Issued Check 613 for $7,200 to Teresa Lojay as a withdrawal for personal use. Had cash sales of $13,500 plus sales tax of $675 during October 15-20 Issued Check 614 to City Utilities for $1,112 to pay the monthly electric bill. (continued) st LO co 12 following totals: earnings, $10,800, s8Llal income tax, $1,020; and net pay, 58,916. The excess withholdings corrected an eror 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 $4,020 from Today's Woman, Invoice 5821, dated October 26; the terms are 1/10, n/30. Issued Checks 616 through 619, totaling $8,916.00, to employees to pay October 29 30 payroll. Issued Check 620 for $475 to Handy Janitors for October janitorial services 31 Had cash sales of $1,700 plus sales tax of $85 for October 29-31 31 The Fashion Rack Postclosing Trial Balance September 30, 2019 CREDIT DEBIT ACCOUNT NAME 59 8 00 00 Cash 62 10 00 Accounts Receivable 42000 Allowance for Doubtful Accounts 88 9 9600 Merchandise Inventory 4 10000 Supplies 8 4 0 0 00 Prepaid Insurance Equipment Accumulated Depreciation-Equipment 83 0 00 00 7050 00 18 3 00 00 Accounts Payable 7 0200 Social Security Tax Payable Medicare Tax Payable 16200 1020 00 5 12 00 Employee Income Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Sales Tax Payable Teresa Lojay, Capital 1268 00 17 8 2000 203 2 5 200 250 5 0 6 00 Totals 250 5 06 00 31 Financial Statements and Closing Procedures TRANSACTIONS Sold merchandise on credit for $820 plus sales tax of $41 to Megan Greening, Sales Sip 244 DATE 24 Purchased merchandise for $3,380 from Classy Threads, Invoice 3418, dated October 23, the terms are 2/10, n/30 25 Issued Check 615 to Regional Telephone for $780 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 $430 from Classy Threads for defective goods that were returned. The original purchase was recorded on October 25. 26 27 29 Sold merchandise on credit for $3,120 plus sales tax of $156 to Emily Tran, Sales Slip 245 29 Recorded the October payroll. The records prepared by the payroll service show the following totals: earnings, $10,800; social security, $702.00; Medicare, $162.00; income tax, $1,020; and net pay, $8.916. The excess withholdings corrected an error made in withholdings in September 29 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. 29 Purchased merchandise for $4,020 from Today's Woman, Invoice 5821, dated October 26; the terms are 1/10, n/30 30 Issued Checks 616 through 619, totaling $8,916.00, to employees to pay October yroll. 31 Issued Check 620 for $475 to Handy Janitors for October janitorial services. 31 Had cash sales of $1,700 plus sales tax of $85 for October 29-31 31 The Fashion Rack Postclosing Trial Balance September 30, 2019 ACCOUNT NAME DEBIT CREDIT Cash 59 8 0 0 00 62 10 00 Accounts Receivable Allowance for Doubtful Accounts 4 20 00 Merchandise Inventory 88 996 00 Supplies Prepoid Insurance 4100 00 8400 00 83 0 0 0 00 Equipment Accumulated Depreciation-Equipment Accounts Payoble Social Security Tax Payable Medicare Tax Poyoble 7 05 0 00 18 300 00 70 2 00 16200 1020 00 Employee Income Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable 5 12 00 12 68 00 17 8 2000 203 252 00 Soles Tax Payable Teresa Lojay, Copital Totois 250 5 06 00 250 5 0 6 00
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