Comprehensive Review Problem CLGL 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 in Dallas, TX. To gain practice in completing the steps in the accounting cycle, assume that the fiscal period consists of one month. 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 CHAPTER 12: FRANCIAL STATEMENTS, CLOSIN ENTRIES, AND REVERSING ENTRIES Liabilities (200-231) 221 Accounts Payable 226 Employees Income Tax Payable 29 State Unemployment Tax Payable 228 FICA Medicare Tax Payable 230 Federal Unemployment Tax Payable 131 Salaries Payable Owner's Equity (300-399) 311 M. L Langdon. Capital 312 M. L Langdon, Drawing 313 Income Summary Revenue (400-499) Cost of Goods Sold (500-999) 511 Purchases SI2 Purchases Returns and Allowances 513 Purchases Discounts 514 Freight in Expenses (600-699) 611 Salaries Expense 612 Payroll Tax Expense 613 Rent Expense 614 Utilities Expense 616 Supplies Expense 617 Insurance Expense 618 Depreciation Expense, Equipment 619 Miscellaneous Expense 411 Sales 412 Sales Returns and Allowances JOURNALS Sales Journal, page 65 Purchases Journal, page 65 Cash Receipts Journal, page 66 Cash Payments Journal, page 67 General Journal, pages 68-71 "If using Working Papers, reference the journal page numbers listed above. ACCOUNTS RECEIVABLE Fashion Decor Hotel Beritz Jason and Waldon ACCOUNTS PAYABLE Brandon, Inc. Kingston Fabrics Magnuson Textiles Tyson Manufacturing Company TRANSACTIONS The following transactions were completed during February of this year. Fabulous Furnishings does not track cash sales by customer. If you are using CLGL select "Cash Sales" as the customer for all cash sales transactions | Reversed the adjusting entry for accrued salaries, S620. 1 Sold merchandise on account to Hotel Beritz.512,520.86, invoice na 5221. 2 Issued Ck No 7216, S16.593.46, to Kingston Fabrics, in payment of its invoice no. 01739 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, 5158 (Continued) Feb S68 COMPREHENSIVE REVIEW PART 3: The Accounting Cycle for a Merchandising Business Feb. Received an electric bill and paid Countywide Power, Cl. No. 7217. 5358 6 Received check from Jason and Waldon, $10,780.51, in payment of account 7 Issued Ck. No 7218.59,684.18, to Magnuson Textiles, in payment of its invoice no. RE64 for $9.782 less I percent discount 9 Cash sales for February 1 through February 9, 89.745.40. 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 Newirk Assume the following tax rates and taxable earnings limits (see the payroll register for beginning cumulative earnings in your Working Papers. This Information is also provided in CengageNow, or CLGL): Social Security taxable earnings, $118.500, with a rate of 6.2 percent for employees and 6.2 percent for employers Medicare taxable earnings, all carnings, 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, 52,335.74, to R. W. Harris. Issued Ck No. 7220, $1.976,39. to T. L Newkirk. 12 Recorded payroll taxes. Assume the following tax rates and taxable carning Federal unemployment taxable earnings, $7,000, with a rate of 0.6 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 5692, credit memo no. 916. 14 Issued Ck No. 7221. $2,900,80, to Mid-State Bank for monthly deposit of January employees' federal income tax withheld, 51.285, FICA Social Security tax, $1,309.54 and FICA Medicare tax, 5306.26. 14 Sold merchandise on account to Jason and Waldon, $15,781.30, invoice no 5222 14 Issued Ck. No. 7222, 54.298.97. to Magnuson Textiles, in payment of its invoice no. RE275 less the credit memo for defective merchandise and less the discount 18 Bought merchandise on account from Brandon, Inc., $21.375.20, invoice no. 164M, dated February 14 terms 2/10, 1/30, FOB Miami, freight prepaid and added to the invoice, $1,242. 18 Cash sales for February 10 through February 18, 57.889.24. 19 Issued Ck No. 7223 payable to Quicker Printing for invoice forms, 5336 (not previously recorded). 19 Received check from Fashion Decor , 54,830,65. in payment of account. 22 Issued Ck. No.7224,512.540, to Tyson Manufacturing Company, in payment of its invoice no. 9264D. 22 Sold merchandise on account to Fashion Decor, 517,435.32, invoice no. 5223 24 Issued credit memo no. 214 to Fashion Decor, $185, for merchandise returned. 24 Bought merchandise on account from Kingston Fabrics, 516,536.90, 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 $287 for Harris and 5216 for Newkirk Note: See the entry of February 12 for taxable earnings limits and tax rates, See the payroll register for this payroll's beginning cumulative earnings, (Continued CHAPTER 12 FINANCIAL STATEMENTS, CLOSING ENTRIES, AND REVERSING ENTRIES Feb 26 Recorded the payroll entry, crediting Salaries Payable 569 COMPREHENSIVE REVIEW 26 Issued Cl. No. 7225, 52.335.74. to R. W. Harris. Issued Cl. No. 7236 $1.976.39. 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 . Federal unemployment taxable carning, 57,000, with a rate of 0,6 percent 27 Issued Ck. No. 7228, 51,035, to IT Freight Line for transportation charge on merchandise purchased from Kingston Fabrics. 28 Issued Ck. No. 7229, $155,60, payable to cash to reimburse the petty cash fund. Petty cash payments consist of Supplies, $130.24, and Miscellaneous Expense, $25.36 28 Cash sales for February 19 through February 28, 58,986.60. 28 Issued Ck. No. 7230, 52.290, to Global Rental Agency for monthly rent. 28 M. L Langdon (owner) withdrew $5,000 for personal use. Ok. No 7231. 1. Journalize and post the transactions completed during February, using either a general journal or special journals or both. (Your instructor will assign you which General Journal. Ignore this section if using CLGL 1. Post daily all entries involving customer accounts to the accounts receivable b. Post daily all entries involving creditor accounts to the accounts payable ledger c. Post daily the general journal entries to the general ledger. Special Journals. Ignore this section if using CIGL a. Post daily the amounts in the Other Accounts columns of the special journals. b. Post daily the general journal c Post the totals of the special columns of the special journals at the end of the Required one(s) to use.) ledger. month. 2. Prepare a schedule of accounts receivable and a schedule of accounts payable. 3. Complete the work sheet for February. Ignore this step if using CIGL Data for the month-end adjustments are as follows: 1-b. Merchandise inventory at February 28, 545,484 c. Salaries accrued at February 28, 52,084. d. Insurance expired during February, $210. c. Depreciation of equipment during February, 51,885. f. Supplies on hand, 5100. 4. Journalize the adjusting entries. If using manual Working Papers, post the adjusting entries to the general ledger. 5. Prepare an income statement 6. Prepare a statement of owner's equity. (No additional investment was made during the month.) 7. Prepare a balance sheet. & Journalize the closing entries. If using manual Working Papers, post to the general ledger 9. Prepare a post-closing trial balance