RODUCTION Fashion Rack has a monthly accounting period. All transactions are recorded in a general journal. Postings are made from the ieral journal to the accounts receivable ledger, accounts payable ledger, and general ledger. The employees are paid at the end of month. A computerized payroll service prepares all payroll records and checks. TRANSACTIONS 1 Issued Check 601 for $4,400 to pay Properties Management, Inc., the monthly rent. 1 Signed a three-month radio advertising contract with Cable Station KTLE for \$5, 180; issued Check 602 to pay the fu11 amount in advance. 2 Received $520 from Megan Greening, a credit customer, in payment of her account. 2 Issued Check 603 for $17,820 to remit the sales tax owed for July through September to the State Tax Commission. 2 Issued Check 664 for $7,673.40 to A Fashion Statement, a creditor, in payment of Invoice 9387 (\$7,830), less a cash discount ($156.60) 3 Sold merchandise on credit for $2,480 plus sales tax of \$124 to Mariam Salib, Sales Slip 241. 4 Issued Check 605 for $1,050 to BMX Supply Co. for supplies. 4 Issued Check 606 for $8,594.60 to Unique Styles, a creditor, in payment of Invoice 5671($8,770), less a cash discount (\$175.40). 5 Collected $1,700.00 on account from Any Trinh, a credit customer. 5 Accepted a return of merchandise from Mariam Salib. The merchandise was originally 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 ( $1,760 ), less a cash discount (\$34). 6 Had cash sales of $18,660 plus sales tax of $930 during October 1-6. 8 Received a check from James Helmer, a credit customer, for $832 to pay the balance he owes. 8 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. 9 Sold merchandise on credit for $2,650 plus sales tax of \$102.50 to Enma Maldonado, 5ales 51 ip 242. 10 Issued Check 609 for $1,525 to pay The Daily News for a newspaper advertisement that appeared in October. 11 Purchased merchandise for $4,820 from A Fashion Statement, Invoice 9422, dated October 8; the terms are 2/10, n/30. 12 Issued Check 610 for $395 to pay freight charges to Ace Freight Company, the trucking company that delivered merchandise from A Fashion Statement on September 27 and October 11. 13 Had cash sales of $13,200 plus sales tax of $660 during october 813. 15 Sold merchandise on credit for \$1,940 plus sales tax of \$97 to James Helmer, Sales 5lip 243. 16. Purchased discontinued merchandise from Acme Jobbers; paid for it immediately with Check 611 for $5,126. 16 Received $510 on account from Mariam Salib, a credit custoner. 16 Issued Check 612 for $4,723.60 to A Fashion Statement, a creditor, in payment of Invoice 9422($4,820.60), less cash discount ($96.40). 18 Issued Check 613 for $7,400 to Teresa Lojay as a withdrawal for personal use. 20 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 bi11. 24 Sold merchandise on credit for $820 plus sales tax of \$41 to Megan Greening, 5ales 5lip 244. 25 Purchased merchandise for $3,580 from Classy Threads, Invoice 3418 , dated October 23; the terms are 2/10,n/30. 26 Issued Check 615 to Regional Telephone for $940 to pay the monthly telephone bill. 27 Had cash sales of $14,240 plus sales tax of $712 during October 22-27. 29 Received Credit Memorandum 175 for $430 from Classy Threads for defective goods that were returned. The original purchase was recorded on October 25. 29 Sold merchandise on credit for \$3,450 plus sales tax of \$172.50 to Amy Trinh, Sales Slip 245. 29 Recorded the October payroll. The records prepared by the payrol1 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 payro11 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. 30 Purchased merchandise for $4,680 from Unique Styles, Invoice 5821, dated October 26; the terms are 1/10, n/30. 31 Issued Checks 616 through 619 , totaling $8,916.60, to employees to pay October payroll. 31 Issued Check 620 for $525 to At Janitors for October janitorial services. 31 Had cash sales of $1,860 plus sales tax of $90 for October 29-31. ADJUSTMENTS 31 During October, the firm had net credit sales of $10,140. From experience with similar businesses, the previous accountant had estimated that 1. percent of the firm's net credit sales would result in uncollectible accounts. Record an adjustment for the expected loss from uncollectible accounts for the month of october. 31 On October 31, an inventory of the supplies showed that items costing $2,740 were on hand. Record an adjustment for the supplies used in october. 31 On September 30 , 20x1, the firm purchased a six-month insurance policy for $8,400. Record an adjustment for the expired insurance for October. 31 On October 1, 20x1, the firm signed a three-month advertising contract for $5,100 with a local cable television station and paid the full amount in advance. Record an adjustment for the expired advertising for october. 31 On Apri1 1, 20x1, the firm purchased equipment for $83,000. The equipment was estimated to have a useful life of five years and a salvage value of $12,500. Record an adjustment for depreciation on the equipment for october. 31 Based on a physical count, ending merchandise inventory was determined to be $82,260. \begin{tabular}{|c|c|c|c|c:c:c|c|c|} \hline Requirement & Schedule of Accts Rec & Schedule of Accts Pay & Worksheet & Income Statement & Stmt of Equity & Balance Sheet & Adjusting and Closing & Postclosing \\ \hline \end{tabular} Prepare a statement of owner's equity for the month ended October 31, 20X1. (Round your answers to 2 decimal places.) THE FASHION RACK Statement of Owner's Equity For Month Ended October 31, 20X1