Question

Problem 10-1A

On January 1, 2017, the ledger of Cullumber Company contained these liability accounts.

Accounts Payable $43,900
Sales Taxes Payable 7,300
Unearned Service Revenue 20,400

During January, the following selected transactions occurred.

Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.
5 Sold merchandise for cash totaling $6,572, which includes 6% sales taxes.
12 Performed services for customers who had made advance payments of $12,000. (Credit Service Revenue.)
14 Paid state treasurer’s department for sales taxes collected in December 2016, $7,300.
20 Sold 640 units of a new product on credit at $48 per unit, plus 6% sales tax.

During January, the company’s employees earned wages of $76,800. Withholdings related to these wages were $5,875 for Social Security (FICA), $5,486 for federal income tax, and $1,646 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31.

Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to nearest whole dollar amount, e.g. 5,275.)

Date
Account Titles and Explanation
Debit
Credit
choose a transaction date

Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date

Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date

Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date

Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date

Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount

Answer 1

JAN'17		Debit	Credit
1	cash A/c	18,000.00
	To Bank loan A/c		18,000.00
	(being loan taken @ 5% rate for 4m)
5	cash a/c	6,572.00
	To Sales A/c		6,510.00
	To Sales Tax payable A/c		62.00
12	Advance a/c	12,000.00
	To Service revenue		12,000.00
14	Sales Tax payable A/c	7,500.00
	To Cash a/c		7,500.00
20	Accounts Receivables	32,563.20
	To Sales A/c		30,720.00
	To Sales Tax payable A/c		1,843.20
31	Wages A/c	76,800.00
	To FICA A/c		5,875.00
	To Federal Tax A/c		5,486.00
	To State Income tax a/c		1,646.00
	To Wages payble a/c		63,793.00
31	Interest on loan a/c	75.00
	To Interest Payable A/c		75.00