I could use some help with this problem On January 1, 2022, the ledger of Splish Brothers Inc. contained these liability accounts.Accounts Payable $52,500Sales Taxes Payable 7,200Unearned Service Revenue 16,500During January, the following selected transactions occurred.Jan. 1 Borrowed $25,200 in cash from Apex Bank on a 3-month, 5%, $25,200 note.5 Sold merchandise for cash totaling $7,632, which includes 6% sales taxes.12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)14 Paid state treasurer’s department for sales taxes collected in December 2021, $7,200.20 Sold 400 units of a new product on credit at $48 per unit, plus 6% sales tax.During January, the company’s employees earned wages of $62,000. Withholdings related to these wages were $4,743 for FICA, $4,450 for federal income tax, and $1,350 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. **Journalizing Adjusting Entries for January 31**This table illustrates how to journalize adjusting entries on January 31 for outstanding notes payable, salaries and wages expense, and payroll tax expense.**Instructions:**- Adjusting entries should be made to reflect accurate balances in accounts at the end of the financial period.- Note that credit account titles will automatically indent when an amount is inputted, ensuring proper formatting.**Table Breakdown:**The table is divided into several columns:- **Date**: Lists the date of the journal entry (here, all entries are dated "Jan. 31").- **Account Titles and Explanation**: Space to enter the name of the account and a brief explanation for the adjustment.- **Debit**: Column to enter the amount to be debited.- **Credit**: Column to enter the amount to be credited.**Adjustments Needed:**1. **Interest Expense** - Entry to adjust interest expense.2. **Salaries and Wages Expense** - Entry to adjust salaries and wages.3. **Payroll Tax Expense** - Entry to adjust payroll tax expense.Each entry will have corresponding debit and credit columns to balance the adjustments. **Date: Jan. 1** - **Account Titles and Explanation:** - Cash - Notes Payable - **Debit:** 25,200 - **Credit:** 25,200 **Date: Jan. 5** - **Account Titles and Explanation:** - Cash - Sales Revenue - Sales Taxes Payable - **Debit:** 7,632 - **Credit:** - Sales Revenue: 7,200 - Sales Taxes Payable: 432 **Date: Jan. 12** - **Account Titles and Explanation:** - Unearned Service Revenue - Service Revenue - **Debit:** 10,000 - **Credit:** 10,000 **Date: Jan. 14** - **Account Titles and Explanation:** - Sales Taxes Payable - Cash - **Debit:** 7,200 - **Credit:** 7,200 **Date: Jan. 20** - **Account Titles and Explanation:** - Accounts Receivable - Sales Revenue - Sales Taxes Payable - **Debit:** 20,352 - **Credit:** - Sales Revenue: 19,200 - Sales Taxes Payable: 1,152

Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Answered: On January 1, 2022, the ledger of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

I could use some help with this problem

On January 1, 2022, the ledger of Splish Brothers Inc. contained these liability accounts.

Accounts Payable		$52,500
Sales Taxes Payable		7,200
Unearned Service Revenue		16,500

During January, the following selected transactions occurred.

Jan. 1		Borrowed $25,200 in cash from Apex Bank on a 3-month, 5%, $25,200 note.
5		Sold merchandise for cash totaling $7,632, which includes 6% sales taxes.
12		Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14		Paid state treasurer’s department for sales taxes collected in December 2021, $7,200.
20		Sold 400 units of a new product on credit at $48 per unit, plus 6% sales tax.

During January, the company’s employees earned wages of $62,000. Withholdings related to these wages were $4,743 for FICA, $4,450 for federal income tax, and $1,350 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.

**Journalizing Adjusting Entries for January 31**

This table illustrates how to journalize adjusting entries on January 31 for outstanding notes payable, salaries and wages expense, and payroll tax expense.

**Instructions:**
- Adjusting entries should be made to reflect accurate balances in accounts at the end of the financial period.
- Note that credit account titles will automatically indent when an amount is inputted, ensuring proper formatting.

**Table Breakdown:**

The table is divided into several columns:
- **Date**: Lists the date of the journal entry (here, all entries are dated "Jan. 31").
- **Account Titles and Explanation**: Space to enter the name of the account and a brief explanation for the adjustment.
- **Debit**: Column to enter the amount to be debited.
- **Credit**: Column to enter the amount to be credited.

**Adjustments Needed:**

1. **Interest Expense**
- Entry to adjust interest expense.

2. **Salaries and Wages Expense**
- Entry to adjust salaries and wages.

3. **Payroll Tax Expense**
- Entry to adjust payroll tax expense.

Each entry will have corresponding debit and credit columns to balance the adjustments.

**Date: Jan. 1**
- **Account Titles and Explanation:**
- Cash
- Notes Payable
- **Debit:** 25,200
- **Credit:** 25,200

**Date: Jan. 5**
- **Account Titles and Explanation:**
- Cash
- Sales Revenue
- Sales Taxes Payable
- **Debit:** 7,632
- **Credit:**
- Sales Revenue: 7,200
- Sales Taxes Payable: 432

**Date: Jan. 12**
- **Account Titles and Explanation:**
- Unearned Service Revenue
- Service Revenue
- **Debit:** 10,000
- **Credit:** 10,000

**Date: Jan. 14**
- **Account Titles and Explanation:**
- Sales Taxes Payable
- Cash
- **Debit:** 7,200
- **Credit:** 7,200

**Date: Jan. 20**
- **Account Titles and Explanation:**
- Accounts Receivable
- Sales Revenue
- Sales Taxes Payable
- **Debit:** 20,352
- **Credit:**
- Sales Revenue: 19,200
- Sales Taxes Payable: 1,152

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.