Prepare an adjusted trial balance and income statement. Cash 26400 Accounts Payable 12100 Inventory 27060 Interest Payable 220 Prepaid Insurance 6280 Notes Payable 44000 Equipment 33440 Owner's Capital 36860 93180 93180 During January 2022, the following transactions occurred. (Sheridan Company uses the perpetual inventory system.) 1. Hydra paid $320 interest on the note payable on January 1, 2022. The note is due December 31, 2023. 2. Hydra purchased $229,768 of inventory on account. 3. Hydra sold for $387,200 cash, inventory which cost $233,200. Hydra also collected $25,168 in sales taxes. 4. Hydra paid $202,400 in accounts payable. 5. Hydra paid $14,960 in sales taxes to the state. 6. Paid other operating expenses of $26,400. 7. On January 31, 2022, the payroll for the month consists of salaries and wages of $56,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $7,840 federal income taxes are withheld. The salaries and wages are paid on February 1. Adjustment data: 8. Interest expense of $320 has been incurred in January on the notes payable. 9. The insurance for the year 2022 was prepaid on December 31, 2021. 10. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $1,760 salvage value. 11. Employer’s payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.6% federal unemployment tax. Journal # Account Title Debit Credit 1 Interest Payable 320 Cash 320 2 Inventory 229768 Accounts Payable 229768 3 Cash 412368 Sales Tax Payable 25168 Sales Revenue 387200 Cost of Goods Sold 233200 Inventory 233200 4 Accounts Payable 202400 Cash 202400 5 Sales Taxes Payable 14960 Cash 14960 6 Other Operating Expenses 26400 Cash 26400 7 Salaries and Wages Exp. 56000 FICA Taxes Payable 4284 Federal Income Taxes Payable 7840 Salaries and Wages Payable 43876 8 Interest Expense 220 Interest Payable 220440 9 Insurance Expense 523.33 Prepaid Insurance 523.33 10 Depreciation Expense 528 Accum Deprec.-Equip 528 11 Payroll Tax Expense 7644 State Unemp.Taxes Payable 3024 Fed. Unemp Taxes Payable 336 FICA Taxes Payable 4284 Prepare an adjusted Trial Balance at January 31, 2022 Prepare an income Statement for the month ended January 31, 2022

Prepare an adjusted trial balance and income statement. Cash 26400 Accounts Payable 12100 Inventory 27060 Interest Payable 220 Prepaid Insurance 6280 Notes Payable 44000 Equipment 33440 Owner's Capital 36860 93180 93180 During January 2022, the following transactions occurred. (Sheridan Company uses the perpetual inventory system.) 1. Hydra paid $320 interest on the note payable on January 1, 2022. The note is due December 31, 2023. 2. Hydra purchased $229,768 of inventory on account. 3. Hydra sold for $387,200 cash, inventory which cost $233,200. Hydra also collected $25,168 in sales taxes. 4. Hydra paid $202,400 in accounts payable. 5. Hydra paid $14,960 in sales taxes to the state. 6. Paid other operating expenses of $26,400. 7. On January 31, 2022, the payroll for the month consists of salaries and wages of $56,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $7,840 federal income taxes are withheld. The salaries and wages are paid on February 1. Adjustment data: 8. Interest expense of $320 has been incurred in January on the notes payable. 9. The insurance for the year 2022 was prepaid on December 31, 2021. 10. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $1,760 salvage value. 11. Employer’s payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.6% federal unemployment tax. Journal # Account Title Debit Credit 1 Interest Payable 320 Cash 320 2 Inventory 229768 Accounts Payable 229768 3 Cash 412368 Sales Tax Payable 25168 Sales Revenue 387200 Cost of Goods Sold 233200 Inventory 233200 4 Accounts Payable 202400 Cash 202400 5 Sales Taxes Payable 14960 Cash 14960 6 Other Operating Expenses 26400 Cash 26400 7 Salaries and Wages Exp. 56000 FICA Taxes Payable 4284 Federal Income Taxes Payable 7840 Salaries and Wages Payable 43876 8 Interest Expense 220 Interest Payable 220440 9 Insurance Expense 523.33 Prepaid Insurance 523.33 10 Depreciation Expense 528 Accum Deprec.-Equip 528 11 Payroll Tax Expense 7644 State Unemp.Taxes Payable 3024 Fed. Unemp Taxes Payable 336 FICA Taxes Payable 4284 Prepare an adjusted Trial Balance at January 31, 2022 Prepare an income Statement for the month ended January 31, 2022

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

Prepare an adjusted trial balance and income statement.


Cash	26400	Accounts Payable	12100
Inventory	27060	Interest Payable	220
Prepaid Insurance	6280	Notes Payable	44000
Equipment	33440	Owner's Capital	36860
	93180		93180

During January 2022, the following transactions occurred. (Sheridan Company uses the perpetual inventory system.)

1.		Hydra paid $320 interest on the note payable on January 1, 2022. The note is due December 31, 2023.
2.		Hydra purchased $229,768 of inventory on account.
3.		Hydra sold for $387,200 cash, inventory which cost $233,200. Hydra also collected $25,168 in sales taxes.
4.		Hydra paid $202,400 in accounts payable.
5.		Hydra paid $14,960 in sales taxes to the state.
6.		Paid other operating expenses of $26,400.
7.		On January 31, 2022, the payroll for the month consists of salaries and wages of $56,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $7,840 federal income taxes are withheld. The salaries and wages are paid on February 1.

Adjustment data:

8.		Interest expense of $320 has been incurred in January on the notes payable.
9.		The insurance for the year 2022 was prepaid on December 31, 2021.
10.		The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $1,760 salvage value.
11.		Employer’s payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.6% federal unemployment tax.

Journal

#	Account Title	Debit	Credit
1	Interest Payable	320
	Cash		320
2	Inventory	229768
	Accounts Payable		229768
3	Cash	412368
	Sales Tax Payable		25168
	Sales Revenue		387200
	Cost of Goods Sold	233200
	Inventory		233200
4	Accounts Payable	202400
	Cash		202400
5	Sales Taxes Payable	14960
	Cash		14960
6	Other Operating Expenses	26400
	Cash		26400
7	Salaries and Wages Exp.	56000
	FICA Taxes Payable		4284
	Federal Income Taxes Payable		7840
	Salaries and Wages Payable		43876
8	Interest Expense	220
	Interest Payable		220440
9	Insurance Expense	523.33
	Prepaid Insurance		523.33
10	Depreciation Expense	528
	Accum Deprec.-Equip		528
11	Payroll Tax Expense	7644
	State Unemp.Taxes Payable		3024
	Fed. Unemp Taxes Payable		336
	FICA Taxes Payable		4284