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https://edugen.wileyplus.com/edugen/student/mainfr.uni CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Problem 10-1A apter On January 1, 2017, the ledger of Romada Company contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $42,500 6,600 19,000 During January, the following selected transactions occurred Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note 5 Sold merchandise for cash totaling $6,254, 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 2016, $6,600. 20 sold 500 units of a new product on credit at $48 per unit, plus 6% sales tax. During January, the company's employees earned wages of $70,000. Withholdings related to these wages were $5,355 for Social Security (FICA), $5,000 for federal income tax, and $1,500 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. Round answers to nearest whole dollar amount, e.g. 5,275.) Date Account Titles and Explanation Debit CreditExplanation / Answer
ROMADA COMPANY General journal for the month of January 2017 Date Account Title Debit Credit Jan.1 Cash 18000 Note Payable 18000 (Cash borrowed on note) Jan.5 Cash 6254 Sales 5900 Sales Tax Payable 354 (Sale of merchandise) Jan.12 Unearned Revenue 10000 Service Revenue 10000 (Service performed against advance received earlier) Jan.14 Sales Tax Payable 6600 Cash 6600 (Payment of sales tax for the month of December) Jan.20 Accounts Receivable 25440 Sales 24000 Sales Tax Payable 1440 (Sale of 500 units at $48 per unit plus sales tax) Jan.31 Salaries and wages expense 70000 FICA social security payable 5355 Federal Income Tax Payable 5000 State Income Tax Payable 1500 Salaries and Wages payable 58145 (Wages accrued for the month of January) Jan.31 Payroll Tax Expense 5355 FICA social security payable 5355 (Payroll tax expense for FICA. Company does not owe anything for Unemployment tax ) Jan.31 Interest Expense 75 Interest Payable 75 (Interest accrued on the note at 5% for one month) ROMADA COMPANY Balance Sheet (Partial) as at January 31, 2017 Current Liabilities Accounts Payable 42500 Sales Tax Payable (6,600+354+1440-6,600) 1794 Unearned Revenue (19,000 - 10,000) 9000 Note Payable 18000 FICA social security payable 10710 Federal Income Tax Payable 5000 State Income Tax Payable 1500 Salaries and Wages payable 58145 Interest Payable 75 Total Current Liabilities 146724
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