Problems Group A P10-25A Journalizing and posting liabilities Learning Objective

Question

Problems Group A P10-25A Journalizing and posting liabilities Learning Objectives 1, 2 The general ledger of Quick Ship at June 30, 2016, the end of the company's fiscal year, includes the following account balances before payroll and adjusting entries. 1d. Rent Revenue $2,500 Accounts Payable Interest Payable Salaries Payable Employee income Taxes Payable FICA-OASDI Taxes Payable FICA-Medicare Taxes Payable Federal Unemployment Taxes Payable State Unemployment Taxes Payable Unearned Rent Revenue Long-term Notes Payable 114,000 6,000 300,000

Explanation / Answer

1.

Notes:

FICA- OASDI Taxes Payable - $4,500* 6.2% = $279

FICA- Medicare Taxes Payable- $4500* 1.45 = $65.29

Unearned Rent as on 30th June - $6000 - $6,000*5/12 = $3,500

Interest Payable as on 30th June = $300,000*10%*11/12= $27,500

2.

Current Liability :

Initial Balance Adjusting Entry Total Accounts Payable $             114,000 $ 114,000 Interest Payable* $         27,500.00 $    27,500 Salaries Payable $           4,500.00 $      4,500 Employee Income Tax Payable $               900.00 $          900 FICA- OASDI Taxes Payable $               279.00 $          279 FICA- Medicare Taxes Payable $                 65.25 $            65 Federal Unemployment Tax Payable $                        -   $             -   Employer Taxes Payable $               279.00 $          279 State Unemployment Tax Payable $             -   Unearned Rent $                  6,000 $           2,500.00 $      3,500 Long Term Notes Payable $             300,000 $ 300,000

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