Question

Sandler 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 ($280,000), payroll deductions for income tax ($30,000), payroll deductions for FICA ($22,000), payroll deductions for United Way ($4,200), employer contributions for FICA (matching) and state and federal unemployment taxes ($2,200). Employees were paid in cash, but payments for the corresponding payroll deductions have not been made and employer taxes have not yet been recorded.

b.

Collected rent revenue of $1,560 on December 10 for office space that Sandler rented to another business. The rent collected was for 30 days from December 11 to January 10 and was credited in full to Unearned Revenue. 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. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Show how any liabilities related to these items should be reported on the company’s balance sheet at December 31. (Do not round intermediate calculations.) Balance Sheet

Answer 1

31-Dec	Salaries and wages expense	280000
	Income tax payable		30000
	FICA taxes payable		22000
	United way payable		4200
	Cash		223800
31-Dec	Payroll taxes	22000
	FICA taxes payable		22000
	Federal unemployement taxes payable		2200
10-Dec	Cash	1560
	Unearned revenue		1560
31-Dec	Unearned revenue	1040
	Rent revenue		1040
	Balance sheet
	Liabilities
	Income tax payable	30000
	FICA taxes payable	44000
	United way payable	4200
	Federal unemployement taxes payable	2200
	Unearned revenue	520
	Total	80920