On January 1, 2025, the ledger of Sunland Company contained these liability accounts. Accounts Payable $43,300 Sales Taxes Payable 7,400 Unearned Service Revenue 19,800 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 $5,512, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $11,800. (Credit Service Revenue.) 14 Paid state treasurer's department for sales taxes collected in December 2024, $7,400. 20 Sold 580 units of a new product on credit at $48 per unit, plus 5% sales tax. During January, the company's employees earned wages of $82,000. Withholdings related to these wages were $6,273 for FICA $5,057 for federal income tax, and $1,517 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, 2025, the ledger of Sunland Company contained these liability accounts. Accounts Payable $43,300 Sales Taxes Payable 7,400 Unearned Service Revenue 19,800 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 $5,512, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $11,800. (Credit Service Revenue.) 14 Paid state treasurer's department for sales taxes collected in December 2024, $7,400. 20 Sold 580 units of a new product on credit at $48 per unit, plus 5% sales tax. During January, the company's employees earned wages of $82,000. Withholdings related to these wages were $6,273 for FICA $5,057 for federal income tax, and $1,517 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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 2. Issued Check No. 410 for 3,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 27,046, in payment of 9,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees earnings of December13: social security tax, 4,632; Medicare tax, 1,158; state unemployment tax, 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020, in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees earnings of December27: social security tax, 4,668; Medicare tax, 1,167; state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3,400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600; office salaries,1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On January 1, 2022, the ledger of Sandhill Co. contained these liability accounts. Accounts Payable $44,600 Sales Taxes Payable 8,700 Unearned Service Revenue 21,100 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 $6,360, 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, $8,700. 20 Sold 710 units of a new product on credit at $54 per unit, plus 5% sales tax. During January, the company’s employees earned wages of $60,000. Withholdings related to these wages were $4,590 for Social Security (FICA), $5,200 for federal income tax, and $1,560 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume…
On January 1, 2025, the ledger of Wildhorse Co. contained these liability accounts. Accounts Payable $44,700 Sales Taxes Payable 8,800 Unearned Service Revenue 21,200 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 $5,512, which includes 6% sales taxes. 12 14 20 20 Performed services for customers who had made advance payments of $13,000. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2024, $8,800. Sold 720 units of a new product on credit at $49 per unit, plus 5% sales tax. During January, the company's employees earned wages of $58,000. Withholdings related to these wages were $4,437 for FICA, $4,200 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…
On January 1, 2022, the ledger of Pharoah Company contained these liability accounts. Accounts Payable $44,200 Sales Taxes Payable 8,300 Unearned Service Revenue 20,700 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 $6,678, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $12,100. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $8,300. 20 Sold 670 units of a new product on credit at $55 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $68,000. Withholdings related to these wages were $5,202 for Social Security (FICA), $5,093 for federal income tax, and $1,528 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax.…
On January 1, 2027, Wildhorse Company's accounting records contained these liability accounts. Accounts Payable $43,600 Sales Taxes Payable 7,700 Unearned Service Revenue 20,100 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 $6,890, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $10,800. (Record Service Revenue.) 14 Paid state treasurer's department for sales taxes collected in December 2026, $7,700. 20 Sold 610 units of a new product on credit at $45 per unit, plus 6% sales tax. During January, the company's employees earned wages of $73,200. Withholdings related to these wages were $5,600 for FIC. $5,229 for federal income tax, and $1,569 for state income tax. The company owed no money related to these earnings for fede state unemployment tax. Assume that wages earned during January will be paid during…
On January 1, 2022, the ledger of Sunland Company contained these liability accounts. Accounts Payable $55,400 Sales Taxes Payable 9,000 Unearned Service Revenue 15,500 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 $6,466, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $12,000. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $9,000. 20 Sold 700 units of a new product on credit at $48 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $72,000. Withholdings related to these wages were $5,508 for FICA, $5,150 for federal income tax, and $1,550 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages…
On January 1, 2022, the ledger of Sunland Company contained these liability accounts. Accounts Payable $55,400 Sales Taxes Payable 9,000 Unearned Service Revenue 15,500 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 $6,466, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $12,000. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $9,000. 20 Sold 700 units of a new product on credit at $48 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $72,000. Withholdings related to these wages were $5,508 for FICA, $5,150 for federal income tax, and $1,550 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages…
The following items were selected from among the transactions completed by Shin Co. during the current year: Jan. 10 Purchased merchandise on account from Beckham Co., $420,000, terms n/30. Feb. 9 Issued a 30-day, 6% note for $420,000 to Beckham Co., on account. Mar. 11 Paid Beckham Co. the amount owed on the note of February 9. May 1 Borrowed $240,000 from Verity Bank, issuing a 45-day, 5% note. June 1 Purchased tools by issuing a $312,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 5%. 15 Paid Verity Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $240,000. (Journalize both the debit and credit to the notes payable account.) July 30 Paid Verity Bank the amount due on the note of June 15. 30 Paid Rassmuessen Co. the amount due on the note of June 1. Dec. 1 Purchased office equipment from Lambert Co. for $700,500 paying $160,500 and issuing a series of ten 5% notes for $54,000…
On January 1, 2021, the ledger of Crane Company contains the following liability accounts. Accounts Payable $63,400 HST Payable 9,400 Unearned Revenue 19,500 During January, the following selected transactions occurred. Jan. 2 Borrowed $33,000 from Canada Bank on a three-month, 6%, $33,000 note. 5 Sold merchandise for cash totalling $25,000 plus 13% HST. Ignore any cost of goods sold entry. 12 Performed services for customers who had made advance payments of $12,200. The payment included HST of $1,404. (Credit Service Revenue.) 14 Paid Receiver General for HST invoiced in December 2020 ($9,400). 20 Sold 1,100 units of a new product on credit at $60 per unit, plus 13% HST. This new product is subject to a one-year warranty. 25 Sold merchandise for cash totalling $15,300 plus 13% HST. (a) Journalize the January transactions. (b) Journalize the adjusting entries at January 31 for (1) the outstanding notes payable, and (2) estimated…