Tesses Tresses 55 Salon Rd. Charlottetown, PE C1A 6D3 Tel: (902) 729-6211 Fax: (902) 728-4821 Business No.: 136 422 375

The salon building they own includes two apartments that are rented to students. These tenants provided postdated cheques for three months at the beginning of January.

Instead of hiring a maintenance, cleaning and laundry company to take care of the premises, the Dubois family shares this responsibility to reduce expenses. Cleaning is required almost continually to meet hygiene standards for health and safety.

The salons regular suppliers provide inventory products, including those used in the salon for client services; office supplies; cleaning supplies for the salon; linens such as towels, capes and gowns; and hairdressing equipment. Supplier records are set up for all of these suppliers as well as for utility service companies and government agencies to which Tesses Tresses remits taxes. The salon pays HST on all purchases.

Although most clients are one-time clients who pay by cash and credit card, some repeat clients have accounts and are entitled to a 2 percent discount if they pay within five days. Net payment is due in 15 days. The cash clients do not receive a discount. A record called Cash Customers is set up for the weekly summaries of cash and credit card sales. Clients pay HST at 15 percent on merchandise they buy from the salon and on all services. The tax rates and codes are entered into client and inventory records, so the program automatically calculates taxes.

Tesses Tresses also provides hair styling services to local theatre companies, cutting and styling hair for cast members before performances, re-styling throughout the show for cast character changes and styling wigs. These evening commitments do not conflict with the usual daytime salon business hours. The theatre companies pay preferred prices at about 20 percent off regular prices in addition to the discount for early payment.

At the beginning of February, some unfilled purchase orders will provide the inventory for the additional sales anticipated for Valentines Day.

The accounting records for Tesses Tresses were converted to Sage 50 at the beginning of January, and the transactions for January have been completed. The files are ready for January bank account transactions (deposits and account reconciliation) and February transactions. The current accounting records include the following:

Chart of Accounts

Trial Balance as at January 31, 2024

Supplier Information

Client Information

Inventory Information

Accounting Procedures

CHART OF ACCOUNTS

TESSES TRESSES

ASSETS

1030

Undeposited Cash and Cheques

1060

Bank: Chequing Account

1080

Bank: Credit Cards

1200

Accounts Receivable

1240

Prepaid Insurance

1260

Prepaid Subscriptions

1300

Towels and Capes

1320

Office Supplies

1340

Washroom & Cleaning Supplies

1360

Salon Supplies

1420

Hair Care Products 1520

Computer and Cash Register

1540

Furniture and Fixtures

1560

Salon Equipment

1580

Salon and Building

LIABILITIES

2100

Bank Loan

2150

Credit Card Payable

2200

Accounts Payable

2750

HST Charged on Sales

2760

HST Paid on Purchases

2850

Mortgage Payable EQUITY

3100

TT Capital

3150

TT Drawings

3600

Net Income

REVENUE

4100

Revenue from Sales

4120

Revenue from Services

4140

Rental Income

4160

Sales Discounts

4220

Interest Revenue

4240

Other Revenue EXPENSE

5020

Advertising and Promotion

5040

Bank Charges

5060

Credit Card Fees

5080

Cost of Services

5180

Inventory Losses

5200

Cost of Goods Sold

5220

Purchase Discounts

5240

Insurance Expense

5260

Subscriptions Expense

5300

Supplies Used

5320

Utilities

5340

Interest Expense

NOTES: The Chart of Accounts includes only postable accounts and Net Income.

TRIAL BALANCE

TESSES TRESSES

January 31, 2024

Debits

Credits

1030

Undeposited Cash and Cheques

$ 17 187.85

1060

Bank: Chequing Account

34 117.66

1080

Bank: Credit Cards

9 660.97

1200

Accounts Receivable

29.90

1240

Prepaid Insurance

750.00

1260

Prepaid Subscriptions

270.00

1300

Towels and Capes

530.00

1320

Office Supplies

330.00

1340

Washroom & Cleaning Supplies

365.00

1360

Salon Supplies

807.00

1420

Hair Care Products

2 435.00

1520

Computer and Cash Register

4 200.00

1540

Furniture and Fixtures

7 600.00

1560

Salon Equipment

4 600.00

1580

Salon and Building

220 000.00

2100

Bank Loan

$ 23 510.00

2150

Credit Card Payable

80.50

2200

Accounts Payable

1 874.50 2750

HST Charged on Sales

$ 3 823.35

2760

HST Paid on Purchases

$ 856.05

2850

Mortgage Payable

149 650.00

3100

TT Capital

104 799.00

4100

Revenue from Sales

5 618.00

4120

Revenue from Services

19 871.00

4140

Rental Income

1 070.00

4160

Sales Discounts

66.75

5060

Credit Card Fees

373.53

5200

Cost of Goods Sold

3 305.00

5220

Purchase Discounts

103.36

5240

Insurance Expense

150.00

5260

Subscriptions Expense

30.00

5300

Supplies Used

1 140.00

5320

Utilities

335.00

5340

Interest Expense

1 260.00

$310 399.71

$310 399.71