You are to record transactions completed by Fabulous Furnishings during February of this year. Beginning balances for the accounts listed below have been provided in your Working Papers. This Company is located ts located in Dallas. To gain practice in completing the steps in the accounting cycle, assume that the fiscal period consists of one month.

Feb 14 Issued Ck. No. 7221, $2.500.80 to Mid-State Bank for monthly deposit of January employees? federal income taxes, $1,615.80.

14 Sold merchandise on account to Jason and Waldon, $15,781.30, invoice no. 5222.

14 Issued Ck. No. 7222. $4.298.97, to Magnuson Textiles, in payment of its invoice no. RE275 less the credit Memo for defective merchandise and less the discount ($41.83).

18 Bought merchandise on account from Brandon, Inc., $21,375.20, invoice no. 164M, dated February 14; terms 2/10, n/30; FOB Miami; freight prepaid and added to the invoice. $1,242 (total $22,617.20)

18 Cash sales for February to through February 18, $7,889.24.

19 Issued Ck. No. 7223 payable to Quicker Printing for invoice forms, $336 (not previously recorded).

19 Received check from Fashion Decor, $4,830.65, in payment of account.

22 Issued Ck. No. 7224, $12,540, to Tyson Manufacturing Company, in payment of its invoice no. 9264D.

22 Sold merchandise on account to Fashion Decor, $17,435.32, invoice no. 5223.

24 Issued credit memo no. 214 to Fashion Decor, $185, for merchandise returned.

24 Bought merchandise on account from Kingston Fabrics, $16,536.90, invoice no. D1797, dated February 22; terms 2/10, n/30; FOB Dallas.

26 Recorded the payroll in the payroll register for regular biweekly salaries for period ended February 26. Salaries: R. W. Harris, $2,840; T. L. Newkirk. $2,374. Income tax withholdings are S287 for Harris and $216 for Newkirk. Note See the entry of February 12 for taxable earnings limits and tax rates. See the payroll register this payroll's beginning cumulative earnings.

26 Recorded the payroll entry, crediting Salaries .Payable.

26 Issued Ck. No. 7225, $2,392.54, to R. W. Harris. Issued Ck. No. 7226, $2.025.87, to T. L. Newkirk. Use two lines and debit salaries Payable.

26 Ck. No, 7227 voided.

26 Recorded payroll taxes. Assume the following tax rates and taxable earnings

?Fedora/ unemployment taxable earnings. $7,000 with rate of 0.8 percent.

? Stale unemployment taxable earnings $7,000 with a rate of 0.8 percent.

27 Issued Ck. No. 7228. $1,035, to JIT Freight for transportation charge on merchandise purchased from Kingston Fabrics.

28 Issued Ck. No. 7229, $155.60, payable Cash to reimburse the petty cash fund. Petty cash payments consist of Supplies, S130.24, and Miscellaneous Expense. $25.36.

28 Cash sales for February 19 through February 28, $8,986.60.

28. Issued Ck. No. 7230, $2,290 to Global Rental Agency for monthly rent.

28. M. L. Langdon (owner) withdrew S5,000 for personal use Ck. No. 7231.

Required

Prepare a schedule of account receivable and a schedule of account payable.

Transcribed Image Text:

CHART OF ACCOUNTS Assets (100-199) 111 Cash 112 Petty Cash Fund 113 Accounts Receivable 114 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 122 Equipment 123 Accumulated Depreciation, Equipment Liabilities (200-299) 221 Accounts Payable 226 Employees' Income Tax Payable 227 FICA Tax Payable 228 State Unemployment Tax Payable 229 Federal Unemployment Tax Payable 230 Salaries Payable Owner's Equity (300-399) 311 M. L. Langdon, Capital 312 M. L. Langdon, Drawing 313 Income Summary Revenue (400-499) 411 Sales 412 Sales Returns and Allowa Cost of Goods Sold (500-599) 511 Purchases 512 Purchases Returns and Allowances 513 Purchases Discounts 514 Freight In Expenses (600-699) 611 Salary Expense 612 Payroll Tax Expense 613 Rent Expense 614 Utilities Expense 616 Supplies Expense 617 Insurance Expense 618 Depreciation Expense, Equipment 619 Miscellaneous Expense 16 TRANSACTIONS The following transactions were completed during February of this year. Feb. 1 Reversed the adjusting entry for accrued salaries, $620. 1 2 Sold merchandise on account to Hotel Beritz, $12,520.86, invoice no. 5221. Issued Ck. No. 7216, $16,593.46, to Kingston Fabrics, in payment of its invoice no. D1739 for $16,932.10 less 2 percent discount. 5 Bought merchandise on account from Magnuson Textiles, $4,874.80, invoice no. RE275, dated February 2; terms 1/10, n/30; FOB Louisville; freight prepaid and added to the invoice, $158 (total, $5,032.80). 6 5 Received an electric bill and paid Countywide Power, Ck. No. 7217, $358. Received check from Jason and Waldon, $10,780.51, in payment of account. Issued Ck. No. 7218, $9,684.18, to Magnuson Textiles, in payment of its invoice no. RE64 for $9,782 less 1 percent discount. 7 Cash sales for February 1 through February 9, $9,745.40. 9 12 Recorded the payroll in the payroll register for regular biweekly salaries for period ended February 12. Salaries: R. W. Harris, $2,840; T. L. Newkirk, $2,374. Income tax withholdings are $287 for Harris and $216 for Newkirk. Assume the following tax rates and taxable earnings limits (see the payroll register in your Working Papers for beginning cumulative earnings): Social Security taxable earnings, $106,800, with a rate of 4.2 percent for employees and 6.2 percent for employers. • Medicare taxable earnings, all earnings, with a rate of 1.45 percent (for both employees and employers). 12 Recorded the payroll entry, crediting Salaries Payable. 12 Issued Ck. No. 7219, $2,392.54, to R. W. Harris. Issued Ck. No. 7220, $2,023.87, to T. L. Newkirk. Use two lines and debit Salaries Payable. (Verify these amounts.) . 12 Recorded payroll taxes. Assume the following tax rates and taxable earnings: Federal unemployment taxable earnings, $7,000, with a rate of 0.8 percent. . State unemployment taxable earnings, $7,000, with a rate of 5.4 percent. . 12 Received a credit memo from Magnuson Textiles for defective merchandise, $692, credit memo no. 916. CHART OF ACCOUNTS Assets (100-199) 111 Cash 112 Petty Cash Fund 113 Accounts Receivable 114 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 122 Equipment 123 Accumulated Depreciation, Equipment Liabilities (200-299) 221 Accounts Payable 226 Employees' Income Tax Payable 227 FICA Tax Payable 228 State Unemployment Tax Payable 229 Federal Unemployment Tax Payable 230 Salaries Payable Owner's Equity (300-399) 311 M. L. Langdon, Capital 312 M. L. Langdon, Drawing 313 Income Summary Revenue (400-499) 411 Sales 412 Sales Returns and Allowa Cost of Goods Sold (500-599) 511 Purchases 512 Purchases Returns and Allowances 513 Purchases Discounts 514 Freight In Expenses (600-699) 611 Salary Expense 612 Payroll Tax Expense 613 Rent Expense 614 Utilities Expense 616 Supplies Expense 617 Insurance Expense 618 Depreciation Expense, Equipment 619 Miscellaneous Expense 16 TRANSACTIONS The following transactions were completed during February of this year. Feb. 1 Reversed the adjusting entry for accrued salaries, $620. 1 2 Sold merchandise on account to Hotel Beritz, $12,520.86, invoice no. 5221. Issued Ck. No. 7216, $16,593.46, to Kingston Fabrics, in payment of its invoice no. D1739 for $16,932.10 less 2 percent discount. 5 Bought merchandise on account from Magnuson Textiles, $4,874.80, invoice no. RE275, dated February 2; terms 1/10, n/30; FOB Louisville; freight prepaid and added to the invoice, $158 (total, $5,032.80). 6 5 Received an electric bill and paid Countywide Power, Ck. No. 7217, $358. Received check from Jason and Waldon, $10,780.51, in payment of account. Issued Ck. No. 7218, $9,684.18, to Magnuson Textiles, in payment of its invoice no. RE64 for $9,782 less 1 percent discount. 7 Cash sales for February 1 through February 9, $9,745.40. 9 12 Recorded the payroll in the payroll register for regular biweekly salaries for period ended February 12. Salaries: R. W. Harris, $2,840; T. L. Newkirk, $2,374. Income tax withholdings are $287 for Harris and $216 for Newkirk. Assume the following tax rates and taxable earnings limits (see the payroll register in your Working Papers for beginning cumulative earnings): Social Security taxable earnings, $106,800, with a rate of 4.2 percent for employees and 6.2 percent for employers. • Medicare taxable earnings, all earnings, with a rate of 1.45 percent (for both employees and employers). 12 Recorded the payroll entry, crediting Salaries Payable. 12 Issued Ck. No. 7219, $2,392.54, to R. W. Harris. Issued Ck. No. 7220, $2,023.87, to T. L. Newkirk. Use two lines and debit Salaries Payable. (Verify these amounts.) . 12 Recorded payroll taxes. Assume the following tax rates and taxable earnings: Federal unemployment taxable earnings, $7,000, with a rate of 0.8 percent. . State unemployment taxable earnings, $7,000, with a rate of 5.4 percent. . 12 Received a credit memo from Magnuson Textiles for defective merchandise, $692, credit memo no. 916.

Answer rating: 100% (QA)

Schedule of account payable Kingston Fabrics Debit Credit Balance cheque 7216 Payment 1659346 1... View the full answer