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On January 1, 2022, the ledger of Crane Company contained these liability accounts. Accounts Payable $44,900...

On January 1, 2022, the ledger of Crane Company contained these liability accounts. Accounts Payable $44,900 Sales Taxes Payable 9,000 Unearned Service Revenue 21,400 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 $5,406, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $13,600. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $9,000. 20 Sold 740 units of a new product on credit at $49 per unit, plus 5% sales tax. During January, the company’s employees earned wages of $54,000. Withholdings related to these wages were $4,131 for Social Security (FICA), $5,379 for federal income tax, and $1,614 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.

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Expert Solution

Date Account Titles Debit Credit
Jan-01 Cash $           18,000
      Notes Payable $           18,000
Jan-05 Cash $             5,406
       Sales Revenue $             5,100
       Sales Tax Payable $                306
Jan-12 Cash $           13,600
       Service Revenue $           13,600
Jan-14 Sales Tax Payable $             9,000
      Cash $             9,000
Jan-20 Cash $           38,436
       Sales Revenue $           36,260
       Sales Tax Payable $             2,176
Jan-31 Wages Expense $           54,000
       Social Security Taxes Payable $             4,131
       Federal Income Tax Payable $             5,379
       State Income Tax Payable $             1,614
       Wages Payable $           42,876
Jan-31 Payroll Tax Expense $             4,131
       Social Security Taxes Payable $             4,131
Jan-31 Interest Expense $                   75
        Interest Payable $                   75

Last entry was not asked in question, but i have still provided.

ekkarill92 answered 1 year ago
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