Plymouth Electronics had the following transactions that produced liabilities during 2020: a. Purchased merchandise on credit for $80,000. (Note: Assume a periodic inventory system.) b. Year-end wages of $40,000 were incurred, but not paid. Related federal income taxes of $13,000 and Medicare taxes of $580 were withheld. Employee wages are all above the Social Security maximum, so only Medicare was paid. c. Year-end estimated income taxes payable, but unpaid, for the year were $113,615. d. Sold merchandise on account for $3,636, including state sales taxes of $180. (Note: Assume a periodic inventory system.) e. Employer's share of Medicare taxes for the period was $580. The taxes will be paid at a later date. 1. Borrowed cash under a 180-day, 8%, $155,000 note. Required: Prepare the entry to record each of these transactions (treat each transaction independently).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Plymouth Electronics had the following transactions that produced liabilities during 2020:
a. Purchased merchandise on credit for $80,000. (Note: Assume a periodic inventory system.)
b. Year-end wages of $40,000 were incurred, but not paid. Related federal income taxes of $13,000 and Medicare taxes of $580 were withheld.
Employee wages are all above the Social Security maximum, so only Medicare was paid.
c. Year-end estimated income taxes payable, but unpaid, for the year were $113,615.
d. Sold merchandise on account for $3,636, including state sales taxes of $180. (Note: Assume a periodic inventory system.)
e. Employer's share of Medicare taxes for the period was $580. The taxes will be paid at a later date.
f.
Borrowed cash under a 180-day, 8%, S155,000 note.
Required:
Prepare the entry to record each of these transactions (treat each transaction independently).
Transcribed Image Text:Instructions Plymouth Electronics had the following transactions that produced liabilities during 2020: a. Purchased merchandise on credit for $80,000. (Note: Assume a periodic inventory system.) b. Year-end wages of $40,000 were incurred, but not paid. Related federal income taxes of $13,000 and Medicare taxes of $580 were withheld. Employee wages are all above the Social Security maximum, so only Medicare was paid. c. Year-end estimated income taxes payable, but unpaid, for the year were $113,615. d. Sold merchandise on account for $3,636, including state sales taxes of $180. (Note: Assume a periodic inventory system.) e. Employer's share of Medicare taxes for the period was $580. The taxes will be paid at a later date. f. Borrowed cash under a 180-day, 8%, S155,000 note. Required: Prepare the entry to record each of these transactions (treat each transaction independently).
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