The Tusquittee Company Chart of Accounts Cash Dividends Payable-Common Merchandise Inventory Notes Payable Land Mortgages Payable Building Common Stock-$1 Par Value Store Fixtures Paid-in Capital in Excess of ParCommon Accumulated Depreciation Paid-In Capital from Treasury Stock Transactions Accounts Payable Retained Earnings Employee Income Taxes Payable Treasury Stock-Common FICA-OASDI Taxes Payable Cash Dividends FICA-Medicare Taxes Payable Sales Revenue Employee Health Insurance Payable Cost of Goods Sold Federal Unemployment Taxes Payable Salaries Expense State Unemployment Taxes Payable Payroll Tax Expense Income Tax Payable Utilities Expense Sales Tax Payable Depreciation Expense Estimated Warranty Payable Warranty Expense Interest Payable Income Tax Expense Interest Expense The Tusquittee Company completed the following transactions during the last quarter of 2018, its first year of operations: Oct. 1 Issued 25,000 shares of $1 par value common stock for cash of $10 per share. Issued a $200,000, 10-year, 8% mortgage payable for land with an existing store building. Mortgage payments of $2,425 are due on the first day of each month, beginning November 1. The assets had the following market values: Land, $40,000; Building, $160,000. Issued a one-year, 10% note payable for $10,000 for store fixtures. The principal and interest are due October 1, 2019. Purchased merchandise inventory on account from Top Rate for $125,000, terms n/30. 15 Paid $160 for utilities. Recorded cash sales for the month of $185,000 plus sales tax of 6%. The cost of the goods sold was $110,000 and estimated warranty payable was 8%. 31 31 Recorded October payroll and paid employees. 31 Accrued employer payroll taxes for October. Nov. 1 Paid the first mortgage payment. 3 Paid Top Rate for the merchandise inventory purchased on October 3. Purchased merchandise inventory on account from Top Rate for $150,000, terms n/30. 12 Purchased 500 shares of treasury stock for $15 per share. 15 Paid all liabilities associated with the October 31 payroll. 15 Remitted (paid) sales tax from October sales to the state of North Carolina. 16 Paid $6,000 to satisfy warranty claims. Declared cash dividends of $1 per outstanding share of common stock. Paid $245 for utilities. 17 18 27 Paid the cash dividends. Recorded cash sales for the month of $140,000 plus sales tax of 6%. The cost of the goods sold was $84,000 and estimated warranty payable was 8%. 30 Recorded November payroll and paid employees. Accrued employer payroll taxes for November. Dec. 1 Paid the second mortgage payment. Paid Top Rate for the merchandise inventory purchased on November 10. O1L 12 Paid $7,500 to satisfy warranty claims. 15 Sold 300 shares of treasury stock for $20 per share. 15 Paid all liabilities associated with the November 30 payroll. 15 Remitted (paid) sales tax from November sales to the state of North Carolina. 18 Paid $220 for utilities. 6 Purchased merchandise inventory on account from Top Rate for $90,000, terms n/30. Recorded cash sales for the month of $210,000 plus sales tax of 6%. The cost of 31 the goods sold was $126,000 and estimated warranty payable was 8%. 31 Recorded December payroll and paid employees. 31 Accrued employer payroll taxes for December. Requirements 1. In preparation for recording the transactions, prepare: a. An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar. b. Payroll registers for October, November, and December. All employees worked October 1 through December 31 and are subject to the following FICA taxes: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45% on earnings above $200,000. Additional payroll information includes: to $200,000, 2.35% dn Monthly Salary Federal Health Employee Income Tax Insurance Kate Jones $ 6,000 $ 1,800 $ 300 000L 450 Mary Smith 000' 008 Sherry Martin 0000 00€ c. Calculations for employer payroll taxes liabilities for October, November, and December: OASDI: 6.2 % on first $118,500 earned; Medicare: 1.45%; SUTA: 5.4% on first $7,000 earned; FUTA: 0.6% on first $7,000 earned 2. Record the transactions in the general journal. Omit explanations. 3. Post to the general ledger. Record adjusting entries for the three month period ended December 31, 2018: a. Depreciation on the Building, straight-line, 40 years, no residual value. b. Store Fixtures, straight-line, 20 years, no residual value. c. Accrued interest expense on the note payable for the store fixtures.