Mini-Practice Set 2 Merchandising Business Accounting Cycle INTRODUCTION INSTRUCTIONS The Fashion Rack The Fashion Rack is a retail merchandisine business that sells brand-nine clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1. 2019, 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 2019 The Fashion Rack has a monthly accounting period. The firm's chart of accounts is shown below. The joumals 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. Y. 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.) 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. (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 gen- cral ledger on a daily basis. 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. 221 Assets 101 111 12 121 131 133 135 141 142 The Fashion Rack Chart of Accounts Liabilities Cash 203 Accounts Payable Accounts Receivable Social Security Tax Payable Allowance for Doubtful Accounts 222 Medicare Tax Payable Wadia Ta Merchandise Inventory Employee Income Tax Payable Supplies 225 Federal Unemployment Tax Payable Prepaid Insurance 227 State Unemployment Tax Payable Prepaid Advertising 229 Salaries Payable Equipment v231 Sales Tax Payable Accumulated Depreciation-Equipment 223 Mini-Practice Set 2 Merchandising Business Accounting Cycle INTRODUCTION INSTRUCTIONS The Fashion Rack The Fashion Rack is a retail merchandisine business that sells brand-nine clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1. 2019, 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 2019 The Fashion Rack has a monthly accounting period. The firm's chart of accounts is shown below. The joumals 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. Y. 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.) 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. (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 gen- cral ledger on a daily basis. 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. 221 Assets 101 111 12 121 131 133 135 141 142 The Fashion Rack Chart of Accounts Liabilities Cash 203 Accounts Payable Accounts Receivable Social Security Tax Payable Allowance for Doubtful Accounts 222 Medicare Tax Payable Wadia Ta Merchandise Inventory Employee Income Tax Payable Supplies 225 Federal Unemployment Tax Payable Prepaid Insurance 227 State Unemployment Tax Payable Prepaid Advertising 229 Salaries Payable Equipment v231 Sales Tax Payable Accumulated Depreciation-Equipment 223
