Citikonk Corporation balance sheet at 12/31/15 is presented below. During 2016,

Question

Citikonk Corporation balance sheet at 12/31/15 is presented below. During 2016, the following transactions occurred: 2.Sales made on account to customers for $180,000 pfus 5.5% sales tax. Cost of sales were $111.300. 3.Received $10,000 cash down payment for orders to be shipped next year. 4.Issued 10 year. S4C.0C0 face. 8% bonds on 7/2/16 at 103. The bonds pay interest every 1/1 and 7/1. 5.Collected $160,000 on account. 6.Paid other operatng expenses of $27,500. 7.Paid $121,030 on account. 8.Paid $8,000 to the state for some of the sales tax collected from customers. 9.On 1/1/16 sold equipment which cost $20,000 with accumulated depreciaton of $8.500 for $4.000 cash. 10.Issued 1.100 shares of $100 par 8% preferred stock for $160,000 cash. 11.Purchased equipment on 7/1/16 for $80,000 for cash. 12.Purchased 400 shares of Citkonk common slock from a disgruntled shareholder for $40 per share. 13.Recorded wages and payroll taxes. Gross wages were $20,000. PICA tax was withheld at a 7.55% rate, federal income taxes (FIT) of $2,000 were withheld, state income taxes (SIT) of $500 were withheld. The Federal unemployment tax (FUTA) rate is 0.9% and the state unemployment (SUTA) rate is 3.5%. The net wage checks were given immediately to employees. The payroll taxes will be paid to the IRS and state in early January.

Explanation / Answer

Cash Particulars Amt Particulars Amt To Balance B/f 16500 By Operating Expenses 27500 To Advance Recd from Customers 10000 By Accounts Payable 121030 To Bonds 41200 By Sales Tax Payable 8000 To Accounts Receivables 160000 By Equipment 80000 To Equipment 4000 By Treasury Stock 16000 To Preferred Stock 110000 By salaries Exp. 15990 To Paid in Capital in Excess of Par 50000 By Balance C/f 123180 391700 391700 Merchandise Inventory Particulars Amt Particulars Amt To Balance B/f 21300 By Cost of Goods Sold 111300 To Accounts Payables 123600 By Balance C/f 33600 144900 144900 Prepaid Insurance Particulars Amt Particulars Amt To Balance B/f 1400 By Balance C/f 1400 1400 1400 Equipment Particulars Amt Particulars Amt To Balance B/f 110000 By Cash 4000 To Cash 80000 By Accumulated Dep. 8500 By Loss On Sale of Equip. 7500 By Balance C/f 170000 190000 190000 Accumulated Depreciation Particulars Amt Particulars Amt To Equipment 8500 By Balance B/f 35800 To Balance C/f 27300 35800 35800 Accounts Payable Particulars Amt Particulars Amt To Cash 121030 By Balance B/f 22530 To Balance C/f 25100 By Merchandise Inventory 123600 By Balance C/f 146130 146130 Commo Stock ($1 Par) Particulars Amt Particulars Amt To Balance C/f 8000 By Balance B/f 8000 8000 8000 Paid in Capital in excess of Par Particulars Amt Particulars Amt To Balance C/f 114000 By Balance B/f 64000 By Cash 50000 114000 114000 Retained Earnings Particulars Amt Particulars Amt To Balance C/f 18870 By Balance B/f 18870 18870 18870 Accounts Receivables Particulars Amt Particulars Amt To Sales 180000 By Cash 160000 To Sales tax payable 9900 By Balance C/f 29900 189900 189900 Sales Particulars Amt Particulars Amt To Balance C/f 180000 By Accounts receivables 180000 180000 180000 Sales Tax payable Particulars Amt Particulars Amt To Cash 8000 By Accounts receivables 9900 To Balance C/f 1900 9900 9900 Cost of goods Sold Particulars Amt Particulars Amt To Merchandise Inventory 111300 By Balance C/f 111300 111300 111300 Advance Recd from Customers Particulars Amt Particulars Amt To Balance C/f 10000 By Cash 10000 10000 10000 Bonds Payable Particulars Amt Particulars Amt To Balance C/f 40000 By Cash 40000 40000 40000 Premium on Issue of Bonds Particulars Amt Particulars Amt To Balance C/f 1200 By Cash 1200 1200 1200 Operating expenses Particulars Amt Particulars Amt To Cash 27500 By Balance c/f 27500 27500 27500 Loss on Sale of Equipmet Particulars Amt Particulars Amt To Equipment 7500 By Balance C/f 7500 7500 7500 Treasury Stock Particulars Amt Particulars Amt To Cash 16000 By Balance C/f 16000 16000 16000 Preferred Stock - 8% ($100 Par) Particulars Amt Particulars Amt To Balance C/f 110000 By Cash 110,000 110000 110000 FICA Tax Payable Particulars Amt Particulars Amt By Balance C/f 1510 By Salaries 1510 1510 1510 Federal Income Tax Payable Particulars Amt Particulars Amt By Balance C/f 2000 By Salaries 2000 2000 2000 State Income Tax Payable Particulars Amt Particulars Amt By Balance C/f 500 By Salaries 500 500 500 Payroll Taxes Particulars Amt Particulars Amt To FUTA Payable 180 By Balance C/f 880 To SUTA Payable 700 880 880 FUTA Payable Particulars Amt Particulars Amt By Balance C/f 180 By Payroll Taxes 180 180 180 SUTA Payable Particulars Amt Particulars Amt By Balance C/f 700 By Payroll Taxes 700 700 700

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