I need help with Mini-Practice Set 2 Fifteenth Edition MC GrawHill Education. I will appreciate the answer. Thank you

CHAPTE 13 499 Financial Statements and Closing Procedunes Mini-Practice Set 2 Merchandising Business Accounting Cycle The Fashion Rack Fashion Rack is a retait merchandising business thes sells brand-name clothing The firm is owned and munaged by Teresa Lojay, who staried the business on Aprt a t wilt give you an opportunity to put your knowtedge of accounting into practice as t April 1, 2019 the accounting work of The Fashion Rack during the month of October 2019 The Fashion Rack has a monthly accounting period. The firn's chan of acoamis is showi ba the journals used to record transactions are the sales journal, purchases journal, cash receipts INTRODUCTION ments journal, and general journal. Postings are made from the journals to the ac nal, cash paym he month. A computerized payroll service prepares all payroll records and checks 1. Open the at the end of neral ledger accounts and enter the balances for October 1,2019. Obiain the nec- essary figures from the postclosing trial balance prepared on September 30.2019, which is eral ledger accounts are already open.) necessary figures from the schedule of accounts INSTRUCTIONS shown below. (If you are using the Study Guide & Working Papers, you will fis 2. Open the subsidiary ledger accounts and cnter the balances for October 1, 2019. Obtain the payable and schedule of accounts recei red on September 30, 2019, which appears below. (If you are using th able prepa the Study Guide & ou will find that the subsidiary ledger accounts are already open.) transactions for October and record each transaction in the proper journ 3. Analyze the al. (Use 10 as the number for the first page of each special journal and 16 as the number for the first page of the general journal.) 4. Post the individual entries that involve customer and creditor accounts from the journals to the subsidiary ledgers on a daily basis. Post the individual entries that appear in the general journal and in the Other Accounts sections of the cash receipts and cash payments journals to the gen- eral ledger on a daily basis. 5. Total, prove, and rule the special journals as of October 31, 2019. 6. Post the column totals from the special journals to the general ledger accounts. The Fashion Rack Chart of Accounts Liabilities 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 Assets 101 Cash 111 Accounts Receivable 12 Allowance for Doubtful Accounts 121 Merchandise Inventory 131 Supplies 133 Prepaid Insurance 135 Prepaid Advertising 141 Equipment 142 Accumulated Depreciation-Equipment 500 CHAPTER 13 Financial Staternents and Closing Procedures The Fashion Rack Chart of Accounts (continued Owners Equity 301 Teresa Lojay. Capita 302 Teresa Lojay, Drawing 399 Income Summary 611 Advertising Expense 614 Depreciation Expense-Equipment 617 Insurance Expense 620 uncollecatble Acounts Expense 401 Sales 402 Sales Returns and Allowances Cost of Goods Sold 501 Purchases 502 Freight In 503 Purchases Returns and Allowances 504 Purchases Discounts Janitorial Services Expense Payroll Taxes Expense Rent Expense Salaries Expense Supplies Expense Telephone Expense Utilities Expense 623 626 629 632 635 638 644 7. Check the accuracy of the subsidiary ledgers by preparing a schedule of accounts receivable and a schedule of payabl the Accounts Receivable accounts payable as of October 31, 2019. Compare the totals with the balances of account and the Accounts Payable account in the general ledger 8. Check the accuracy of the general ledger by preparing a trial balance in the first two columns of a 10-c Com olumn worksheet. Make sure that the total debits and the total credits are equal. 9. plete the Adjustments section of the worksheet. Use the following data. Identify each adjustment with the appropriate a. Du ring October, the firm had net credit sales of $9,810. From experience with similar usinesses, the previous accountant had estimated that 1.0 percent of the firm's net credit sales would result i n uncollectible accounts. Record an adjustment for the expected loss from uncollectible accounts for the month of October. b. O n October 31, an inventory of the supplies showed that items costing $3,240 were on hand. Record an adjustment for the supplies used in October. On September 30, 2019, the firm purchased a six-month insurance policy for $8.400. e. Record an adjustment for the expired insurance for October d. On October 1, 2019, the firm signed a three-month advertising contract for $4,800 with a local cable television station and paid the full amount in advance. Record an adjustment for the expired advertising for October. On April 1.2019, the firm purchased equipment for $83,000. The equipment was esti- mated to have a useful life of five years and a salvage value of $12.500. Record an adjust- ment for depreciation on the equipment for October e. f.-g. Based on a physical count, ending merchandise inventory was determined to be $81,260. 10. Complete the Adjusted Trial Balance section of the worksheet. I1. Determine the net income or net loss for October and complete the worksheet. 12. Prepare a classified income statement for the month ended October 31, 2019. (The firm does not divide its operating expenses into selling and administrative expenses.) 13. Prepare a statement of owner's equity for the month ended October 31, 2019. 14. Prepare a classified balance sheet as of October 31, 2019 15. Journalize and post the adjusting entries using general journal page 17 16. Prepare and post the closing entries using general journal page 18. 17. Prepare a postclosing trial balance. CHAPTER 13 501 Financial Slatements and Closing Procedures DATE TRANSACTIONS Oct Issued Check 601 for $4,.200 to pay City Properties the m Signed a three- monthly rent. advertising month radio advertising contract with Cable Station KOTU for $4,800 Check 602 to pay the full amount in advance. 2 Received $520 from Megan Greening, a cr Is edit customer, in payment of her account. sued Check 603 for $17,820 to remit the sales tax owed for July through ember to the State Tax Commission. nt of Issued Check 604 for $7.673.40 to A Fashion Statement, a creditor, in payme Invoice 9387 (57.830), less a cash discount ($156.60) 3 Sold merchandise cred on credit for $2,480 plus sales tax of $124 to Dimitri Sayegh, Sales Slip 241 Iss ued Check 605 for $1,050 to BMX Supply Co. for supplies. Issued Check 606 for $8.594.60 to Today's Woman, a creditor, in 5671 ($8,770), less a cash discount ($175.40). Collected $1,700.00 on account from Emily Tran, a credit customer Accepted a return of merchandise fr nally sold on Sales Slip 241, dated October 3, issued Credit Memor 4 payment of Invoice om Dimitri Sayegh. The merchandise was origi- 18 for $630, which includes sales tax of $30. nt of Invoice Issued Check 607 for $1,666 to Classy Threads, a creditor, in payme 3292 ($1,700), less a cash discount ($34). 6 Had cash sales of $18,600 plus sales tax of $930 during October 1-6. eceived a check from James Helmer, a credit customer, for $832 to pay the balance he owes. 8 Issued Check 608 for $1,884 to deposit social security tax ($702), Medicare tax o. (S162), and federal income tax withholding ($1,020) from the September payroll Record this check in the cash payments journal. Sold merchandise on Maldonado, Sales Slip 242. redit for $2,050 plus sales tax of $102.50 to Emma Issued Check 609 for $1,445 to pay The City Daily for a newspaper advertisement that appeared in October 10 Purchased merchandise for $4,820 from A Fashion Statement, invoice 9422, dated October 8; the terms are 2/10, n/30. 11 Issued Check 610 for $375 to pay freight charges to Ace Freight Company, the truck ing company that delivered merchandise from A Fashion Statement on September 27 and October 11. 12 13 Had cash sales of $12,300 plus sales tax of $615 during October 8-13 15 Sold merchandise on credit for $1,940 plus sales tax of $97 to James Helmer, Sales Slip 243. Purchased discontinued merchandise from Acme Jobbers, paid for it immediately 16 with Check 611 for $6,420. Received $510 on account from Dimitri Sayegh, a credit customer. 16 16 Issued Check 612 for $4.723.60 to A Fashion Statement, a creditor, in payment of 1 Invoice 9422 ($4,820.00), ess cash discount ($96.40) Issued Check 613 for $7,200 to Teresa Lojay as a withdrawal for personal use Had cash sales of $13,500 plus sales tax of $675 during October 15-20. 18 20 22 Issued Check 614 to City Utilities for $1,112 to pay the monthly electric bil. (continued) r Financial Staternents and Ciosing Procedures DATE TRANSACTIONS on credit for $820 plus sales tax of $41 to Megan Greening, Sales Sip 244. Otob 2chandise for $3,380 from Classy Threads, Invoice 3418, dated Had cash sales of $14,240 plus 23; the terms are 2/10, n/30. o Regional Telephone for $780 to pay the monthly telephone bil sales tax of $712 during October 22-27 27 morandum 175 for $430 from Classy Threads for defective goods 25 were returned. The original purchase was recorded on Octobe e on credit for $3,120 plus sales tax of $ 156 to Emily Tran, Sales Slip 245. Recorded the October 29 payroll. The records prepared by the payroll service show the earnings, $10,800, sociai security, $702.00; Medicare, $162.00; and net pay, $8,916. The excess withhoidings corrected an error employer's payroll taxes, which were calculated by the payroll service: tax, $584. This, too, reflects an understatement of taxes recorded in income t made in withholdings in September 29 Recorded the payro social security, $702; Medicare $162; federal unemployment tax, $118; and state September and corrected in this month Purchased October 26; the terms are 1 /10, /30. 30 merchandise for $4,020 from Today's Woman, Invoice 5821, dated 31 Issued Checks 616 through 619, totaling $8,916.00, to employees to pay Octo payroll. For the sake of simplicity, enter the tota of the checks on a single line in cash payments journa 31 Issued Check 620 for $475 to Handy Janitors for October janitorial services. 31 Had cash sales of $1,700 plus sales tax of $85 for October 29-31. The Fashion Rack Postclosing Trial Balance September 30, 2019 CREDT DEBIT ACCOUNT NAME Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise invento 5980000 2 10 00 88996 00 8400 00 4 20 00 Prepaid insuronce Equipment Accumulated Depreciation-Equipment Accounts Payable Social Security Tox Poyable Medicare Tax Payable Employee Income Tax Payable 8300000 050 00 18 3 0 0 00 70 2 00 6 200 0 2 0 00 5 1 2 00 26 8 00 17 8 2 0 00 203 2 5 2 00 250 5 0 6 00 250 5 0 600 Federal Unemployment Tax Poyable State Unemployment Tax Payable Soles Tax Payable Tereso Lojay. Copital Totols CHAPTER 13 503 Financial Statements and Closing Procedures The Fashion Rack Schedule of Accounts Payable September 30, 2019 A Fashion Statement Classy T Todoy's Woman Total 8 3000 117 00100 7 0 00 18 3 00 00 The Fashion Rack Schedule of Accounts Receivable September 30,2019 9 5 00 5 2 000 83 2 00 2 3 2 00 6 2100 5 1 0 00 170000 62 10 00 Jennifer Brown Megan Greening Jomes Helmer Emma Maldonodo Jim Price Dimitri Sayegh Emily Tran Total CHAPTE 13 499 Financial Statements and Closing Procedunes Mini-Practice Set 2 Merchandising Business Accounting Cycle The Fashion Rack Fashion Rack is a retait merchandising business thes sells brand-name clothing The firm is owned and munaged by Teresa Lojay, who staried the business on Aprt a t wilt give you an opportunity to put your knowtedge of accounting into practice as t April 1, 2019 the accounting work of The Fashion Rack during the month of October 2019 The Fashion Rack has a monthly accounting period. The firn's chan of acoamis is showi ba the journals used to record transactions are the sales journal, purchases journal, cash receipts INTRODUCTION ments journal, and general journal. Postings are made from the journals to the ac nal, cash paym he month. A computerized payroll service prepares all payroll records and checks 1. Open the at the end of neral ledger accounts and enter the balances for October 1,2019. Obiain the nec- essary figures from the postclosing trial balance prepared on September 30.2019, which is eral ledger accounts are already open.) necessary figures from the schedule of accounts INSTRUCTIONS shown below. (If you are using the Study Guide & Working Papers, you will fis 2. Open the subsidiary ledger accounts and cnter the balances for October 1, 2019. Obtain the payable and schedule of accounts recei red on September 30, 2019, which appears below. (If you are using th able prepa the Study Guide & ou will find that the subsidiary ledger accounts are already open.) transactions for October and record each transaction in the proper journ 3. Analyze the al. (Use 10 as the number for the first page of each special journal and 16 as the number for the first page of the general journal.) 4. Post the individual entries that involve customer and creditor accounts from the journals to the subsidiary ledgers on a daily basis. Post the individual entries that appear in the general journal and in the Other Accounts sections of the cash receipts and cash payments journals to the gen- eral ledger on a daily basis. 5. Total, prove, and rule the special journals as of October 31, 2019. 6. Post the column totals from the special journals to the general ledger accounts. The Fashion Rack Chart of Accounts Liabilities 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 Assets 101 Cash 111 Accounts Receivable 12 Allowance for Doubtful Accounts 121 Merchandise Inventory 131 Supplies 133 Prepaid Insurance 135 Prepaid Advertising 141 Equipment 142 Accumulated Depreciation-Equipment 500 CHAPTER 13 Financial Staternents and Closing Procedures The Fashion Rack Chart of Accounts (continued Owners Equity 301 Teresa Lojay. Capita 302 Teresa Lojay, Drawing 399 Income Summary 611 Advertising Expense 614 Depreciation Expense-Equipment 617 Insurance Expense 620 uncollecatble Acounts Expense 401 Sales 402 Sales Returns and Allowances Cost of Goods Sold 501 Purchases 502 Freight In 503 Purchases Returns and Allowances 504 Purchases Discounts Janitorial Services Expense Payroll Taxes Expense Rent Expense Salaries Expense Supplies Expense Telephone Expense Utilities Expense 623 626 629 632 635 638 644 7. Check the accuracy of the subsidiary ledgers by preparing a schedule of accounts receivable and a schedule of payabl the Accounts Receivable accounts payable as of October 31, 2019. Compare the totals with the balances of account and the Accounts Payable account in the general ledger 8. Check the accuracy of the general ledger by preparing a trial balance in the first two columns of a 10-c Com olumn worksheet. Make sure that the total debits and the total credits are equal. 9. plete the Adjustments section of the worksheet. Use the following data. Identify each adjustment with the appropriate a. Du ring October, the firm had net credit sales of $9,810. From experience with similar usinesses, the previous accountant had estimated that 1.0 percent of the firm's net credit sales would result i n uncollectible accounts. Record an adjustment for the expected loss from uncollectible accounts for the month of October. b. O n October 31, an inventory of the supplies showed that items costing $3,240 were on hand. Record an adjustment for the supplies used in October. On September 30, 2019, the firm purchased a six-month insurance policy for $8.400. e. Record an adjustment for the expired insurance for October d. On October 1, 2019, the firm signed a three-month advertising contract for $4,800 with a local cable television station and paid the full amount in advance. Record an adjustment for the expired advertising for October. On April 1.2019, the firm purchased equipment for $83,000. The equipment was esti- mated to have a useful life of five years and a salvage value of $12.500. Record an adjust- ment for depreciation on the equipment for October e. f.-g. Based on a physical count, ending merchandise inventory was determined to be $81,260. 10. Complete the Adjusted Trial Balance section of the worksheet. I1. Determine the net income or net loss for October and complete the worksheet. 12. Prepare a classified income statement for the month ended October 31, 2019. (The firm does not divide its operating expenses into selling and administrative expenses.) 13. Prepare a statement of owner's equity for the month ended October 31, 2019. 14. Prepare a classified balance sheet as of October 31, 2019 15. Journalize and post the adjusting entries using general journal page 17 16. Prepare and post the closing entries using general journal page 18. 17. Prepare a postclosing trial balance. CHAPTER 13 501 Financial Slatements and Closing Procedures DATE TRANSACTIONS Oct Issued Check 601 for $4,.200 to pay City Properties the m Signed a three- monthly rent. advertising month radio advertising contract with Cable Station KOTU for $4,800 Check 602 to pay the full amount in advance. 2 Received $520 from Megan Greening, a cr Is edit customer, in payment of her account. sued Check 603 for $17,820 to remit the sales tax owed for July through ember to the State Tax Commission. nt of Issued Check 604 for $7.673.40 to A Fashion Statement, a creditor, in payme Invoice 9387 (57.830), less a cash discount ($156.60) 3 Sold merchandise cred on credit for $2,480 plus sales tax of $124 to Dimitri Sayegh, Sales Slip 241 Iss ued Check 605 for $1,050 to BMX Supply Co. for supplies. Issued Check 606 for $8.594.60 to Today's Woman, a creditor, in 5671 ($8,770), less a cash discount ($175.40). Collected $1,700.00 on account from Emily Tran, a credit customer Accepted a return of merchandise fr nally sold on Sales Slip 241, dated October 3, issued Credit Memor 4 payment of Invoice om Dimitri Sayegh. The merchandise was origi- 18 for $630, which includes sales tax of $30. nt of Invoice Issued Check 607 for $1,666 to Classy Threads, a creditor, in payme 3292 ($1,700), less a cash discount ($34). 6 Had cash sales of $18,600 plus sales tax of $930 during October 1-6. eceived a check from James Helmer, a credit customer, for $832 to pay the balance he owes. 8 Issued Check 608 for $1,884 to deposit social security tax ($702), Medicare tax o. (S162), and federal income tax withholding ($1,020) from the September payroll Record this check in the cash payments journal. Sold merchandise on Maldonado, Sales Slip 242. redit for $2,050 plus sales tax of $102.50 to Emma Issued Check 609 for $1,445 to pay The City Daily for a newspaper advertisement that appeared in October 10 Purchased merchandise for $4,820 from A Fashion Statement, invoice 9422, dated October 8; the terms are 2/10, n/30. 11 Issued Check 610 for $375 to pay freight charges to Ace Freight Company, the truck ing company that delivered merchandise from A Fashion Statement on September 27 and October 11. 12 13 Had cash sales of $12,300 plus sales tax of $615 during October 8-13 15 Sold merchandise on credit for $1,940 plus sales tax of $97 to James Helmer, Sales Slip 243. Purchased discontinued merchandise from Acme Jobbers, paid for it immediately 16 with Check 611 for $6,420. Received $510 on account from Dimitri Sayegh, a credit customer. 16 16 Issued Check 612 for $4.723.60 to A Fashion Statement, a creditor, in payment of 1 Invoice 9422 ($4,820.00), ess cash discount ($96.40) Issued Check 613 for $7,200 to Teresa Lojay as a withdrawal for personal use Had cash sales of $13,500 plus sales tax of $675 during October 15-20. 18 20 22 Issued Check 614 to City Utilities for $1,112 to pay the monthly electric bil. (continued) r Financial Staternents and Ciosing Procedures DATE TRANSACTIONS on credit for $820 plus sales tax of $41 to Megan Greening, Sales Sip 244. Otob 2chandise for $3,380 from Classy Threads, Invoice 3418, dated Had cash sales of $14,240 plus 23; the terms are 2/10, n/30. o Regional Telephone for $780 to pay the monthly telephone bil sales tax of $712 during October 22-27 27 morandum 175 for $430 from Classy Threads for defective goods 25 were returned. The original purchase was recorded on Octobe e on credit for $3,120 plus sales tax of $ 156 to Emily Tran, Sales Slip 245. Recorded the October 29 payroll. The records prepared by the payroll service show the earnings, $10,800, sociai security, $702.00; Medicare, $162.00; and net pay, $8,916. The excess withhoidings corrected an error employer's payroll taxes, which were calculated by the payroll service: tax, $584. This, too, reflects an understatement of taxes recorded in income t made in withholdings in September 29 Recorded the payro social security, $702; Medicare $162; federal unemployment tax, $118; and state September and corrected in this month Purchased October 26; the terms are 1 /10, /30. 30 merchandise for $4,020 from Today's Woman, Invoice 5821, dated 31 Issued Checks 616 through 619, totaling $8,916.00, to employees to pay Octo payroll. For the sake of simplicity, enter the tota of the checks on a single line in cash payments journa 31 Issued Check 620 for $475 to Handy Janitors for October janitorial services. 31 Had cash sales of $1,700 plus sales tax of $85 for October 29-31. The Fashion Rack Postclosing Trial Balance September 30, 2019 CREDT DEBIT ACCOUNT NAME Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise invento 5980000 2 10 00 88996 00 8400 00 4 20 00 Prepaid insuronce Equipment Accumulated Depreciation-Equipment Accounts Payable Social Security Tox Poyable Medicare Tax Payable Employee Income Tax Payable 8300000 050 00 18 3 0 0 00 70 2 00 6 200 0 2 0 00 5 1 2 00 26 8 00 17 8 2 0 00 203 2 5 2 00 250 5 0 6 00 250 5 0 600 Federal Unemployment Tax Poyable State Unemployment Tax Payable Soles Tax Payable Tereso Lojay. Copital Totols CHAPTER 13 503 Financial Statements and Closing Procedures The Fashion Rack Schedule of Accounts Payable September 30, 2019 A Fashion Statement Classy T Todoy's Woman Total 8 3000 117 00100 7 0 00 18 3 00 00 The Fashion Rack Schedule of Accounts Receivable September 30,2019 9 5 00 5 2 000 83 2 00 2 3 2 00 6 2100 5 1 0 00 170000 62 10 00 Jennifer Brown Megan Greening Jomes Helmer Emma Maldonodo Jim Price Dimitri Sayegh Emily Tran Total