On January 1, 2014, the ledger of Hiatt Company contained these liability accoun

Question

On January 1, 2014, the ledger of Hiatt Company contained these liability accounts.

During January, the company’s employees earned wages of $73,180. Withholdings related to these wages were $5,598 for Social Security (FICA), $5,227 for federal income tax, and $1,568 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 January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Explanation / Answer

5 Jan - Journal entry

Cash Account debit 7102

Sales revenue account credit 6700

Sales tax payable account credit 402

Current liabilities

Sales tax payable 402

FICA taxes payable 5598

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