Question
In: Accounting
Problem 10-1A On January 1, 2017, the ledger of Sheridan Company contained these liability accounts. Accounts...
Problem 10-1A
On January 1, 2017, the ledger of Sheridan Company contained
these liability accounts.
| Accounts Payable | $43,200 | |
| Sales Taxes Payable | 6,950 | |
| Unearned Service Revenue | 19,700 |
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 $5,936, which includes 6% sales taxes. | |
| 12 | Performed services for customers who had made advance payments of $10,300. (Credit Service Revenue.) | |
| 14 | Paid state treasurer’s department for sales taxes collected in December 2016, $6,950. | |
| 20 | Sold 570 units of a new product on credit at $52 per unit, plus 6% sales tax. |
During January, the company’s employees earned wages of $78,800.
Withholdings related to these wages were $6,028 for Social Security
(FICA), $5,629 for federal income tax, and $1,689 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.
a)Journalize the January transactions.
b)Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense
c)Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable.
Solutions
Expert Solution
a)January Transactions
1 Jan:- Cash A/c Dr . $18000
To Apex Bank A/c. $18000
5 Jan:- Cash A/c. Dr. $5936
To Sales A/c. $5600
To Sales tax payable A/c $336
12 Jan:- Unearned service revenue A/c Dr. $10300
To Service revenue A/c . $10300
14 Jan:- Sales tax payable A/c Dr. $6950
To Cash A/c $6950
20 Jan:- Debtors A/c Dr $31418.4
To Sales A/c $29640
To Sales tax payable A/c . $1778.4
b) Adjusting entries
i) Wages A/ c Dr $78800
To Employees A/c $65454
To Social security payable A/c $6028
To Federal income tax payable A/c $5629
To State income tax payable A/c $1689
ii) Interest A/c Dr. $75
To Apex bank A/c $75
c) Current Liabilities :-
Account payable $43200
Unearned service revenue $9400
Apex Bank $18000
Interest payable to Apex bank $75
Sales tax payable $2114.4
Employees $65454
Social security payable $6028
Federal income tax payable $5629
State income tax $1689
ekkarill92 answered 2 years agoRelated Solutions
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On January 1, 2017, the ledger of Ivanhoe Company contained
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Sales Taxes Payable
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Unearned Service Revenue
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Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%,
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5
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contained these liability accounts. Accounts Payable $42,700 Sales
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the following selected transactions occurred. Jan. 1 Borrowed
$18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. 5
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treasurer’s department...
On January 1, 2017, the ledger of Sheridan Company contained these liability accounts. Accounts Payable $44,300...
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these liability accounts. Accounts Payable $44,300 Sales Taxes
Payable 7,500 Unearned Service Revenue 20,800 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 $6,254, which includes 6% sales
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payments of $12,500. (Credit Service Revenue.) 14 Paid state
treasurer’s department for sales...
On January 1, 2017, the ledger of Sheridan Company contains the following liability accounts. Accounts Payable...
On January 1, 2017, the ledger of Sheridan Company contains the
following liability accounts.
Accounts Payable
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6,600
Unearned Revenue
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During January, the following selected transactions
occurred.
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Borrowed $23,000 from Canada Bank on a three-month, 6%, $23,000
note.
5
Sold merchandise for cash totalling $17,600 plus 13% HST.
12
Performed services for customers who had made advance payments
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14
Paid Receiver General for HST...
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Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%,
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Sold merchandise for cash totaling $6,360, which includes 6%
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Performed services for customers who had made advance payments
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from Apex Bank on a 4-month, 5%, $18,000 note. 5 Sold merchandise
for cash totaling $5,406, which includes 6% sales taxes. 12
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Sales Taxes Payable
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Unearned Service Revenue
20,500
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Jan. 1
Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%,
$18,000 note.
5
Sold merchandise for cash totaling $6,360, which includes 6%
sales taxes.
12
Performed services for customers who had made advance payments
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14
Paid state treasurer’s department for sales...
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FICA Taxes Payable...................................................................................$ 760.00
Federal Income Taxes Payable.............................................................1,204.60
State Income Taxes Payable.....................................................................108.95
Federal Unemployment Taxes Payable................................................288.95
State Unemployment Taxes Payable.................................................1,954.40
Union Dues Payable....................................................................................870.00
U.S. Savings Bonds Payable.....................................................................360.00
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Jan. 10 Sent check for $870.00 to union treasurer for union dues.
12 Remitted check for $1,964.60 to the Federal Reserve bank for FICA taxes and federal income taxes withheld....
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