Question

Lakeview Company completed the following two transactions. The annual accounting period ends December 31.

a.

On December 31, calculated the payroll, which indicates gross earnings for wages ($104,000), payroll deductions for income tax ($10,400), payroll deductions for FICA ($7,800), payroll deductions for American Cancer Society ($3,900), employer contributions for FICA (matching), and state and federal unemployment taxes ($780). Employees were paid in cash, but payments for the corresponding payroll deductions have not yet been made and employer taxes have not yet been recorded.

b.

Collected rent revenue of $6,450 on December 10 for office space that Lakeview rented to another business. The rent collected was for 30 days from December 12 to January 10 and was credited in full to Unearned Rent Revenue.

Required:

1& 2.	Complete the required journal entries for the above transactions as shown below:
	(i) Prepare the entries required on December 31 to record payroll.
	(ii) Prepare the journal entry for the collection of rent on December 10.
	(iii) Prepare the adjusting journal entry on December 31.
	(Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

3.	Show how any liabilities related to these items should be reported on the company’s balance sheet at December 31.

Answer 1

Ques 1& 2
date	General Journal	Debit	credit
Dec-31	Salaries and wages expense	104000
	cash		81900
	withheld income taxes payable		10400
	charitable contributionds payable		3900
	FICA payable		7800
Dec-31	Payroll tax expense	8580
	state and federal unemployment taxes payable		780
	FICA Payable		7800
Dec-10	Cash	6450
	unearned revenue		6450
Dec-31	unearned revenue	4300
	rent revenue		4300
	6450*20/30
Ques 3
	Lakeview company
	balance sheet
	Dec-31
	current liablities
	withheld income taxes payable	10400
	charitable contributionds payable	3900
	FICA payable	15600
	unearned revenue	2150
	state and federal unemployment taxes payable	780
	total current liabilties	32830