The Fashion Rack is a retail merchandising business that sells brand name clothing at discount prices. The firm is owned and managed by Teresa Lojay
Cash 59800 
adjusted cash total 48544.40
Chapter 13 Mini-Practice Set 2 A Saved 1 general journal 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. 10 points eBook Print References DATE TRANSACTIONS Oct. 1 Issued Check 6e1 for $4,480 to pay Properties Management, Inc., the monthly rent. 1 Signed a three-month radio advertising contract with Cable Station KTLE for $5,100; issued Check 6e2 to pay the full amount in advance. 2 Received $520 from Megan Greening, a credit customer, in payment of her account 2 Issued Check 683 for $17,820 to remit the sales tax owed for July through September to the State Tax Commission. 2 Issued Check 684 for $7,673.40 to A Fashion Statement, a creditor, in payment of Invoice 9387 ($7,830), less a cash discount ($156.60). Sold merchandise on credit for $2,489 plus sales tax of $124 to Mariam Salib, Sales Slip 241. Issued Check 685 for $1,5e to BMX Supply Co. for supplies. 4 Issued Check 686 for $8,594.60 to Unique Styles, a creditor, in payment of Invoice 5671 ($8,778), less a cash discount , (, ($175.42) 5 Collected $1,780.80 on account from Amy 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. Issued Check 607 for $1,666 to Classy Threads, a creditor, in payment of Invoice 3292 ($1,700), less a cash discount ($34). 6 Had cash sales of $18,6ee plus sales tax of $93e 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 688 for $1,884 to deposit social security tax ($702), Medicare tax ($162), and federal income tax withholding ($1,e2e) from the September payroll. $) 9 Sold merchandise on credit for $2,058 plus sales tax of $102.5e to Emma Maldonado, Sales Slip 242. 10 Issued Check 689 for $1,525 to pay The Daily News for a newspaper advertisement that appeared in October. 11 Purchased merchandise for $4,829 from A Fashion Statement, Invoice 9422, dated October 8; the terms are 2/10, n/30 12 Issued Check 512 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 $13,280 plus sales tax of $660 during October 8-13. 15 Sold merchandise on credit for $1,940 plus sales tax of $97 to James Helmer, Sales Slip 243. 16 Purchased discontinued merchandise from Acme Jobbers; paid for it immediately with Check 611 for $5,129. 16 Received $510 on account from Mariam Salib, a credit customer. 16 Issued Check 512 for $4,723.68 to A Fashion Statement, a creditor, in payment of Invoice 9422 ($4,82.ee), less cash discount ($96.40). 18 Issued Check 613 for $7,480 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 bill. 24 Sold merchandise on credit for $82e plus sales tax of $41 to Megan Greening, Sales Slip 244. 25 Purchased merchandise for $3,589 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 payroll service show the following totals: earnings, $10,800; social security, $782.ee; Medicare, $162.ee; 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. 30 Purchased merchandise for $4,688 from Unique Styles, Invoice 5821, dated October 26; the terms are 1/10, n/3e. 31 Issued Checks 616 through 619, totaling $8,916.80, to employees to pay October payroll. 31 Issued Check 629 for $525 to At Janitors for October janitorial services. 31 Had cash sales of $1,800 plus sales tax of $99 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 1.6 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, 2exi, the firm purchased a six-month insurance policy for $8,409. Record an adjustment for the expired insurance for October. 31 On October 1, 2exi, 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 April 1, 2exi, the firm purchased equipment for $83,eee. The equipment was estimated to have a useful life of five years and a salvage value of $12,580. 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. Proulard Prepare the trial balance section of the worksheet. Then prepare the Adjustments section using the adjusting transactions. Now complete the worksheet. (Round your answers to 2 decimal places.) Account Name 101: Cash IS 111: Accounts receivable 112: Allowance for doubtful accounts 121: Merchandise inventory 131: Supplies 133: Prepaid insurance 135: Prepaid advertising 141: Equipment 142: Accumulated depreciation-Equipment 203: Accounts payable 221: Social security tax payable 222: Medicare tax payable 223: Employee income tax payable 225: Federal unemployment tax payable 227: State unemployment tax payable 229: Salaries payable 231: Sales tax payable 301: Teresa Lojay, Capital 302: Teresa Lojay. Drawing 399: Income summary 401: Sales 402: Sales returns and allowances 501: Purchases 502: Freight in 503: Purchases returns and allowances 504: Purchases discounts 611: Advertising expense 614: Depreciation expense-Equipment 617: Insurance expense 620: Uncollectible accounts expense 623: Janitorial services expense 626: Payroll taxes expense 629: Rent expense 632: Salaries expense 635: Supplies expense 638: Telephone expense THE FASHION RACK Worksheet For Month Ended October 31, 20X1 Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 48,544.40 s 48,544,40 % S 48,544.40 S 48,544.40 X S 48,544.40 13,295.00 13,295.00 X 13.295.00 13,295.00 13,295.00 420.00 420.00 X 420.00 X 420.00 X 420.00 X 88.990.00 889,900.00 X 88,950.00 88.960.00 88.980.00 % 5.150.00 5,150.00 5.150.00 X 5,150.00 % 5,150.00 X 8.400.00 4,800.00 X 4,800.00 X 4,800.00 X 4,800.00 5.100.00 5,100.00 5,100.00 5,100.00 % 5,100.00 % 83.000.00 83,000.00 X 83,000.00 83,000.00 X 8,300.00 7,050.00 7,050.00 X % 7,050.00 X 7,050.00% X 7,050.00% X 88,998.00% X 5,920.00 X 5.920.00 X 5,920.00 X 5,920.00 % 1.404.00 1,404.00 X 1,404.00 1,404.00 X 1.404.00 324.00 324.00 X 324.00 324.00 X 324.00 1,020.00 1.020.00 X 1.020.00 1.020.00 X 1.020.00 630.00 630.00 X 630.00 630.00 X 630.00 1,852.00 1,852.00 X 1,852.00 1,852.00 X 1.852.00 0.00 0.00 0.00 0.00 0.00 3.574.00 3,574.00 X 3,574.00 3,574.00 X 3,574.00 203,252.00 20,352.00 X 20.352.00 X 20,352.00 X 20,352.00 X 7.400.00 7,400.00 7,400.00 7,400.00 7,400.00 0.00 x 0.00 X 0.00 $ 0.00 % 0.00 72,080.00 72,080.00 X 72,080.00 72,080.00 72,080.00 X 600.00 600.00 600.00 600.00 600.00 X 0.00 $ 0.00 X 0.00 $ 0.00 X 395.00 395.00 X 395.00 395.00 395.00 X 0.00 X 0.00 X 0.00 0.00 X 0.00 X 462,40 % 462.40 X 462.40 X 482.40 X 462.40 X 1.525.00 1,525.00 1,525.00 X 1,525.00 1,525.00 X 1.175.00 X 1,175,00 1,175.00 1.175.00 1,175,00 X 1.400.00 X 1,400.00 1,400.00 1,400.00 1,400.00 X 101.40 X 101.40 101.40 101.40 101.40 X 525.00 525.00 525.00 525.00 525.00 $ 1.588.00 1,566.00 X 1,566.00 1,566.00 1,566.00 X 4,400.00 4,400.00 X 4,400.00 4.400.00 4,400.00 X 10.800.00 10.800.00 X 10,800.00 10,800.00 10,800.00 2.410.00 $ 2.410.00 2,410.00 2,410.00 2,410.00 940.00 940.00 X 940.00 940.00 940.00 X 4 Ann . 4 Anna 14. nn 4 1 Annnn 4 1 An An OG RAAI RAREA Prev 1 of 1 1 Next > Chapter 13 Mini-Practice Set 2 A Saved 1 general journal 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. 10 points eBook Print References DATE TRANSACTIONS Oct. 1 Issued Check 6e1 for $4,480 to pay Properties Management, Inc., the monthly rent. 1 Signed a three-month radio advertising contract with Cable Station KTLE for $5,100; issued Check 6e2 to pay the full amount in advance. 2 Received $520 from Megan Greening, a credit customer, in payment of her account 2 Issued Check 683 for $17,820 to remit the sales tax owed for July through September to the State Tax Commission. 2 Issued Check 684 for $7,673.40 to A Fashion Statement, a creditor, in payment of Invoice 9387 ($7,830), less a cash discount ($156.60). Sold merchandise on credit for $2,489 plus sales tax of $124 to Mariam Salib, Sales Slip 241. Issued Check 685 for $1,5e to BMX Supply Co. for supplies. 4 Issued Check 686 for $8,594.60 to Unique Styles, a creditor, in payment of Invoice 5671 ($8,778), less a cash discount , (, ($175.42) 5 Collected $1,780.80 on account from Amy 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. Issued Check 607 for $1,666 to Classy Threads, a creditor, in payment of Invoice 3292 ($1,700), less a cash discount ($34). 6 Had cash sales of $18,6ee plus sales tax of $93e 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 688 for $1,884 to deposit social security tax ($702), Medicare tax ($162), and federal income tax withholding ($1,e2e) from the September payroll. $) 9 Sold merchandise on credit for $2,058 plus sales tax of $102.5e to Emma Maldonado, Sales Slip 242. 10 Issued Check 689 for $1,525 to pay The Daily News for a newspaper advertisement that appeared in October. 11 Purchased merchandise for $4,829 from A Fashion Statement, Invoice 9422, dated October 8; the terms are 2/10, n/30 12 Issued Check 512 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 $13,280 plus sales tax of $660 during October 8-13. 15 Sold merchandise on credit for $1,940 plus sales tax of $97 to James Helmer, Sales Slip 243. 16 Purchased discontinued merchandise from Acme Jobbers; paid for it immediately with Check 611 for $5,129. 16 Received $510 on account from Mariam Salib, a credit customer. 16 Issued Check 512 for $4,723.68 to A Fashion Statement, a creditor, in payment of Invoice 9422 ($4,82.ee), less cash discount ($96.40). 18 Issued Check 613 for $7,480 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 bill. 24 Sold merchandise on credit for $82e plus sales tax of $41 to Megan Greening, Sales Slip 244. 25 Purchased merchandise for $3,589 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 payroll service show the following totals: earnings, $10,800; social security, $782.ee; Medicare, $162.ee; 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. 30 Purchased merchandise for $4,688 from Unique Styles, Invoice 5821, dated October 26; the terms are 1/10, n/3e. 31 Issued Checks 616 through 619, totaling $8,916.80, to employees to pay October payroll. 31 Issued Check 629 for $525 to At Janitors for October janitorial services. 31 Had cash sales of $1,800 plus sales tax of $99 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 1.6 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, 2exi, the firm purchased a six-month insurance policy for $8,409. Record an adjustment for the expired insurance for October. 31 On October 1, 2exi, 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 April 1, 2exi, the firm purchased equipment for $83,eee. The equipment was estimated to have a useful life of five years and a salvage value of $12,580. 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. Proulard Prepare the trial balance section of the worksheet. Then prepare the Adjustments section using the adjusting transactions. Now complete the worksheet. (Round your answers to 2 decimal places.) Account Name 101: Cash IS 111: Accounts receivable 112: Allowance for doubtful accounts 121: Merchandise inventory 131: Supplies 133: Prepaid insurance 135: Prepaid advertising 141: Equipment 142: Accumulated depreciation-Equipment 203: Accounts payable 221: Social security tax payable 222: Medicare tax payable 223: Employee income tax payable 225: Federal unemployment tax payable 227: State unemployment tax payable 229: Salaries payable 231: Sales tax payable 301: Teresa Lojay, Capital 302: Teresa Lojay. Drawing 399: Income summary 401: Sales 402: Sales returns and allowances 501: Purchases 502: Freight in 503: Purchases returns and allowances 504: Purchases discounts 611: Advertising expense 614: Depreciation expense-Equipment 617: Insurance expense 620: Uncollectible accounts expense 623: Janitorial services expense 626: Payroll taxes expense 629: Rent expense 632: Salaries expense 635: Supplies expense 638: Telephone expense THE FASHION RACK Worksheet For Month Ended October 31, 20X1 Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 48,544.40 s 48,544,40 % S 48,544.40 S 48,544.40 X S 48,544.40 13,295.00 13,295.00 X 13.295.00 13,295.00 13,295.00 420.00 420.00 X 420.00 X 420.00 X 420.00 X 88.990.00 889,900.00 X 88,950.00 88.960.00 88.980.00 % 5.150.00 5,150.00 5.150.00 X 5,150.00 % 5,150.00 X 8.400.00 4,800.00 X 4,800.00 X 4,800.00 X 4,800.00 5.100.00 5,100.00 5,100.00 5,100.00 % 5,100.00 % 83.000.00 83,000.00 X 83,000.00 83,000.00 X 8,300.00 7,050.00 7,050.00 X % 7,050.00 X 7,050.00% X 7,050.00% X 88,998.00% X 5,920.00 X 5.920.00 X 5,920.00 X 5,920.00 % 1.404.00 1,404.00 X 1,404.00 1,404.00 X 1.404.00 324.00 324.00 X 324.00 324.00 X 324.00 1,020.00 1.020.00 X 1.020.00 1.020.00 X 1.020.00 630.00 630.00 X 630.00 630.00 X 630.00 1,852.00 1,852.00 X 1,852.00 1,852.00 X 1.852.00 0.00 0.00 0.00 0.00 0.00 3.574.00 3,574.00 X 3,574.00 3,574.00 X 3,574.00 203,252.00 20,352.00 X 20.352.00 X 20,352.00 X 20,352.00 X 7.400.00 7,400.00 7,400.00 7,400.00 7,400.00 0.00 x 0.00 X 0.00 $ 0.00 % 0.00 72,080.00 72,080.00 X 72,080.00 72,080.00 72,080.00 X 600.00 600.00 600.00 600.00 600.00 X 0.00 $ 0.00 X 0.00 $ 0.00 X 395.00 395.00 X 395.00 395.00 395.00 X 0.00 X 0.00 X 0.00 0.00 X 0.00 X 462,40 % 462.40 X 462.40 X 482.40 X 462.40 X 1.525.00 1,525.00 1,525.00 X 1,525.00 1,525.00 X 1.175.00 X 1,175,00 1,175.00 1.175.00 1,175,00 X 1.400.00 X 1,400.00 1,400.00 1,400.00 1,400.00 X 101.40 X 101.40 101.40 101.40 101.40 X 525.00 525.00 525.00 525.00 525.00 $ 1.588.00 1,566.00 X 1,566.00 1,566.00 1,566.00 X 4,400.00 4,400.00 X 4,400.00 4.400.00 4,400.00 X 10.800.00 10.800.00 X 10,800.00 10,800.00 10,800.00 2.410.00 $ 2.410.00 2,410.00 2,410.00 2,410.00 940.00 940.00 X 940.00 940.00 940.00 X 4 Ann . 4 Anna 14. nn 4 1 Annnn 4 1 An An OG RAAI RAREA Prev 1 of 1 1 Next >
