On January 1, 2022, the ledger of Sandhill Co. contained these liability accounts.Accounts Payable $44,600Sales Taxes Payable 8,700Unearned Service Revenue 21,100During 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 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. Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in Accounts Payable.SANDHILL CO.Balance Sheet (Partial)January 31, 2022Current LiabilitiesAccounts Payable44600Sales Taxes Payable2277Interest Payable75Social security4590Federal Income Taxes Payable5200State Income Taxes Payable1560Salaries and Wages Payable48650Notes Payable18000Unearned Service Revenue7500Total Current Liabilities132452%24%24 Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payrlltax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date Account Titles and ExplanationDebitCreditJan. 31Interest Expense75Interest Payable75(To record the interest on outstanding notes payable.)Jan. 31Salaries and Wages Expense60000Social security4590Federal Income Taxes Payable5200State Income Taxes Payable1560Salaries and Wages Payable48650(To record payroll and withholding taxes.)Jan. 31(To record employer's payroll taxes.)

Adjusting entries are the one which are prepared at year-end so that financial statements can be…

Answered: Prepare the current liabilities section…

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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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 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.

Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in Accounts Payable.
SANDHILL CO.
Balance Sheet (Partial)
January 31, 2022
Current Liabilities
Accounts Payable
44600
Sales Taxes Payable
2277
Interest Payable
75
Social security
4590
Federal Income Taxes Payable
5200
State Income Taxes Payable
1560
Salaries and Wages Payable
48650
Notes Payable
18000
Unearned Service Revenue
7500
Total Current Liabilities
132452
%24
%24

Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payrll
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
Interest Expense
75
Interest Payable
75
(To record the interest on outstanding notes payable.)
Jan. 31
Salaries and Wages Expense
60000
Social security
4590
Federal Income Taxes Payable
5200
State Income Taxes Payable
1560
Salaries and Wages Payable
48650
(To record payroll and withholding taxes.)
Jan. 31
(To record employer's payroll taxes.)

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