On January 1, 2017, Sheridan Company\'s accounting records contained these liabi

Question

On January 1, 2017, Sheridan Company's accounting records contained these liability accounts.
Accounts Payable $43,200 Sales Taxes Payable 6,950 Unearned Service Revenue 19,700
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 $5,936, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $10,300. (Record Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2016, $6,950. 20 Sold 570 units of a new product on credit at $52 per unit, plus 6% sales tax.
During January, the company’s employees earned wages of $78,800. Withholdings related to these wages were $6,028 for Social Security (FICA), $5,629 for federal income tax, and $1,689 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. Wages or payroll tax expense have not been recorded as of January 31.

Explanation / Answer

ans 2 Cash Acc rec Notes pay Accpay Salaries & wages payable uneraned service revenue Sales taxes payable Int pay FICA taxes pay Fed Inc Taxes pay St inc tax pay S unemp taxes pay Common stock Revenue expenses Dividend baL $43,200 $19,700 $6,950 1-Jan 18000 18000 5-Jan 5936 336 5600 (5600*6%) (5936/1.06) 12-Jan -10300 10300 14-Jan -6950 -6950 20-Jan 31418 1778 29640 (29640*6%) (570*52) Adj 31-Jan 65454 6028 5629 1689 78800 (exp-taxes) 31-Jan 6028 6028 31-Jan 75 75 (18000*5%*1/12) Total 16986 31418.4 18000 43200 65454 9400 2114.4 75 12056 5629 1689 0 0 45540 84903 Balance SHEET As of the end of the month Jan 31 2017 Current Liabilities Accounts payable $43200 Salaries & wages payable 65454 Unearned service revenue 9400 Sales Tax payable 2114 Interest payable 75 Notes payable $18,000 FICA taxes payable 12056 Federal Income Tax payable 5629 State Income Tax payable 1689 Total Current Liabilities 157617

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