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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
![Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll
tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 31
(to adjust interest expense)
Jan. 31
(to adjust salaries and wages expense)
Jan. 31
(to adjust payroll tax expense)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b0ab463-4d4c-475b-97de-464c7d60d430%2Fc6e67a5b-9925-48e6-9980-3c5cc16216c5%2Fdoupp8v_processed.png&w=3840&q=75)
Transcribed Image Text:Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll
tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 31
(to adjust interest expense)
Jan. 31
(to adjust salaries and wages expense)
Jan. 31
(to adjust payroll tax expense)
![Date
Account Titles and Explanation
Debit
Credit
Jan. 1
Cash
25200
Notes Payable
25200
Jan. 5
Cash
7632
Sales Revenue
7200
Sales Taxes Payable
432
Jan. 12 +
Unearned Service Revenue
10000
Service Revenue
10000
Jan. 14 +
Sales Taxes Payable
7200
Cash
7200
Jan. 20 +
Accounts Receivable
20352
Sales Revenue
19200
Sales Taxes Payable
1152](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b0ab463-4d4c-475b-97de-464c7d60d430%2Fc6e67a5b-9925-48e6-9980-3c5cc16216c5%2Fy026ej_processed.png&w=3840&q=75)
Transcribed Image Text:Date
Account Titles and Explanation
Debit
Credit
Jan. 1
Cash
25200
Notes Payable
25200
Jan. 5
Cash
7632
Sales Revenue
7200
Sales Taxes Payable
432
Jan. 12 +
Unearned Service Revenue
10000
Service Revenue
10000
Jan. 14 +
Sales Taxes Payable
7200
Cash
7200
Jan. 20 +
Accounts Receivable
20352
Sales Revenue
19200
Sales Taxes Payable
1152
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