Question

Quality Appliance Service is a service enterprise. the account balances for Quality Appliance Service as of the current date are as follows:

Cash- 248,658.10

Accounts recievable- 217,700.00

Supplies and parts- 192,050.00

Prepaid insurance- 34,400.00

Land- 82,000.00

Building- 142,000.00

Accumulated depreciation- building 19,200

Vehicles- 66,000.00

Accumulated depreciation- vehicles 20,000

equipmment- 27,800

Accumulated depreciation- Equipment 8,800.00

Accounts payable- 68,395.00

Wages and salaries payable- 6,900.00

Payroll taxes payable- 14,001.50

I.M. serviceman, capital- 817,450.00

I.M. serviceman, drawing- 26,000

Service fees earned- 337,600

Wages and salaries expense- 96,845.00

Payroll tax expense- 7,364.80

Supplies and parts expense- 70,500.00

Insurance Expense- 11,467.00

Telephone expense- 1,548.00

Utilities expense- 14,739.00

Depreciation expense- Vehicles 1,250.00

Depreciation expense- Equipment 550.00

Depreciation expense- Building 1,200.00

Repair expense- 44,200.60

Miscellaneous expense- 6,074.00

Debit Total- 1,292,346.50. Credit total- 1,292, 346.50

During the following month, the following transactions were completed:

1. Recieved a $46,000 check from Hotpoint Sales on account.

2. Recieved a $285 cash from a customer for appliance repair services provided.

3. The customer above returned the appliance that we repaired and stated that the repair work was not satisfactory. we gave them a cash refund of $200.

4. Purchased $7,246 of parts and supplies from Motor and Transmission Supply on account.

5. Paid the telephone bill $250.

6. Sent a check for $11,365 to Belt and Hose Supply on account.

7. Billed Whirlpool Sales $4,365 for appliance repair services provided on account.

8. A portion of the supplies purchased from Motor and Transmission Supply did not meet manufacturer specifications for appliance replacement parts. we returned these parts for a credit on our account of $2,060.

9. Recieved a $23,000 check from Kenmore Sales on account.

10. Sent a check for $14,780 to Gasket and Washer Supply on account.

11. Paid the electric bill for the current month of $432.

12. Purchased $386 of parts and supplies on account from Gasket and Washer Supply.

13. Billed Maytag Sales for $1,400 for appliance repair services provided on account.

Prepared payroll checks for the following employees:

Betty J. Jones- Salary of 1307.69

John M. Doe- 80 hours regular time and 10 hours overtime (regular rate $12 per hour, OT 1.5)

Sam R. Public- 80 hours regular time and 4 hours overtime (regular rate $10 per hour, OT 1.5)

Instructions

1. Journalize the 13 transactions using the current rules of debits and credits. You will use the trial balance on the 1st page for your charts of accounts.

2. Prepare the attached payroll register for the company's three employees using the following information for the deductions.

Medicare tax is 1.45% of gross earnings

Social security tax is 6.2% of gross earnings

Federal tax withholding is computed using Circular E Employer's tax Guide for Biweekly Payroll Period

Betty J. Jones is married and claims no depentents

John Doe is married and claims no dependents

Sam Public is single and claims one dependent

State tax is 2.5% gross earnings

City tax is 2.0% gross earnings

Answer 1