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

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.).

Answer:

Balance Sheet Accounts Income Statement Accounts

100 Assets400 Revenues

110 Cash410 Sales

112 Accounts Receivable 500 Expenses

114 Merchandise Inventory 510 Cost of Merchandise Sold

115 Estimated Returns Inventory 520 Sales Salaries Expense

116 Store Supplies 521 Advertising Expense

117 Office Supplies 522 Depreciation Expense—

118 Prepaid Insurance Store Equipment

120 Land523 Store Supplies Expense

123 Store Equipment 524 Delivery Expense

124 Accumulated Depreciation— 529 Miscellaneous Selling 

Store Equipment Expense

125 Office Equipment 530 Office Salaries Expense

126 Accumulated Depreciation— 531 Rent Expense

Office Equipment 532 Depreciation Expense—

200 LiabilitiesOffice Equipment

210 Accounts Payable 533 Insurance Expense

211 Customer Refunds Payable 534 Office Supplies Expense

212 Salaries Payable 539 Miscellaneous 

213 Notes Payable Administrative Expense

300 Owner’s Equity 600 Other Expense

310 Kailey Garner, Capital 610 Interest Expense

311 Kailey Garner, Drawing