Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical order, as follows:

Accounts Payable

Accounts Receivable

Accumulated Depreciation—Office Equipment

Accumulated Depreciation—Store Equipment

Advertising Expense

Cash

Cost of Merchandise Sold

Customer Refunds Payable

Delivery Expense

Depreciation Expense—Office Equipment

Depreciation Expense—Store Equipment

Estimated Returns Inventory

Insurance Expense

Interest Expense

Kailey Garner, Capital

Kailey Garner, Drawing

Land

Merchandise Inventory

Miscellaneous Administrative Expense

Miscellaneous Selling Expense

Notes Payable

Office Equipment

Office Salaries Expense

Office Supplies

Office Supplies Expense

Prepaid Insurance

Rent Expense

Salaries Payable

Sales

Sales Salaries Expense

Store Equipment

Store Supplies

Store Supplies Expense

Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 2. Each account number is three digits: the first digit is to indicate the major classification (1 for assets, for example); the second digit is to indicate the subclassification (11 for current assets, for example); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Merchandise Inventory, etc.).