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On January 1, 2022, the ledger of Splish Brothers Inc. contained these liability accounts. Accounts Payable   $52,500 Sales Taxes Payable   7,200 Unearned Service Revenue   16,500 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 $7,632, which includes 6% sales taxes. 12   Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) 14   Paid state treasurer’s department for sales taxes collected in December 2021, $7,200. 20   Sold 400 units of a new product on credit at $48 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $62,000. Withholdings related to these wages were $4,743 for FICA, $4,450 for federal income tax, and $1,350 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, 2022, the ledger of Splish Brothers Inc. contained these liability accounts. Accounts Payable   $52,500 Sales Taxes Payable   7,200 Unearned Service Revenue   16,500 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 $7,632, which includes 6% sales taxes. 12   Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) 14   Paid state treasurer’s department for sales taxes collected in December 2021, $7,200. 20   Sold 400 units of a new product on credit at $48 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $62,000. Withholdings related to these wages were $4,743 for FICA, $4,450 for federal income tax, and $1,350 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.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter10: Accounting For Sales And Cash Receipts
Section: Chapter Questions
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On January 1, 2022, the ledger of Splish Brothers Inc. contained these liability accounts.

Accounts Payable   $52,500
Sales Taxes Payable   7,200
Unearned Service Revenue   16,500


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 $7,632, which includes 6% sales taxes.
12   Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14   Paid state treasurer’s department for sales taxes collected in December 2021, $7,200.
20   Sold 400 units of a new product on credit at $48 per unit, plus 6% sales tax.


During January, the company’s employees earned wages of $62,000. Withholdings related to these wages were $4,743 for FICA, $4,450 for federal income tax, and $1,350 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.

Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll 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 (to adjust interest expense) Jan. 31 (to adjust salaries and wages expense) Jan. 31 (to adjust payroll tax expense)
Transcribed Image Text:Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll 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 (to adjust interest expense) Jan. 31 (to adjust salaries and wages expense) Jan. 31 (to adjust payroll tax expense)
Date Account Titles and Explanation Debit Credit Jan. 1 Cash 25200 Notes Payable 25200 Jan. 5 Cash 7632 Sales Revenue 7200 Sales Taxes Payable 432 Jan. 12 + Unearned Service Revenue 10000 Service Revenue 10000 Jan. 14 + Sales Taxes Payable 7200 Cash 7200 Jan. 20 + Accounts Receivable 20352 Sales Revenue 19200 Sales Taxes Payable 1152
Transcribed Image Text:Date Account Titles and Explanation Debit Credit Jan. 1 Cash 25200 Notes Payable 25200 Jan. 5 Cash 7632 Sales Revenue 7200 Sales Taxes Payable 432 Jan. 12 + Unearned Service Revenue 10000 Service Revenue 10000 Jan. 14 + Sales Taxes Payable 7200 Cash 7200 Jan. 20 + Accounts Receivable 20352 Sales Revenue 19200 Sales Taxes Payable 1152
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