Riverside Company completed the following two transactions. The annual accounting period endsDecember 31.a. On December 31, calculated the payroll, which indicates gross earnings for wages ($130,000),payroll deductions for income tax ($13,000), payroll deductions for FICA ($10,000), payrolldeductions for United Way ($2,000), employer contributions for FICA (matching), and stateand federal unemployment taxes ($1,300). Employees were paid in cash, but these paymentsand the corresponding payroll deductions and employer taxes have not yet been recorded.b. Collected rent revenue of $3,600 on December 10 for office space that Riverside rented toanother business. The rent collected was for 30 days from December 11 to January 10 and wascredited in full to Unearned Rent Revenue.Required:1. Give the journal entries to record payroll on December 31.2. Give ( a ) the journal entry for the collection of rent on December 10 and ( b ) the adjusting journal entry on December 31.TIP: Notice that the revenue recorded on December 10 includes revenue for 10 days (out of 30)that isn’t earned until after December 31.3. Show how any liabilities related to these items should be reported on the company’s balancesheet at December 31.
Riverside Company completed the following two transactions. The annual accounting period ends
December 31.
a. On December 31, calculated the payroll, which indicates gross earnings for wages ($130,000),
payroll deductions for income tax ($13,000), payroll deductions for FICA ($10,000), payroll
deductions for United Way ($2,000), employer contributions for FICA (matching), and state
and federal
and the corresponding payroll deductions and employer taxes have not yet been recorded.
b. Collected rent revenue of $3,600 on December 10 for office space that Riverside rented to
another business. The rent collected was for 30 days from December 11 to January 10 and was
credited in full to Unearned Rent Revenue.
Required:
1. Give the journal entries to record payroll on December 31.
2. Give ( a ) the
TIP: Notice that the revenue recorded on December 10 includes revenue for 10 days (out of 30)
that isn’t earned until after December 31.
3. Show how any liabilities related to these items should be reported on the company’s balance
sheet at December 31.
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