P10-3 Recoralng and Reporting Current Llabllties L0 10-21 [The following informa
ID: 2574104 • Letter: P
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P10-3 Recoralng and Reporting Current Llabllties L0 10-21 [The following information applies to the questions displayed below] Riverside Company completed the following two transactions. The annual accounting period ends December 31 a. On December 31, calculated the payroll, which indicates gross earnings for wages ($230,000), payroll deductions for income tax ($23,000), payroll deductions for FICA ($30,000), payroll deductions for United Way ($6,000), employer contributions for FICA (matching), and state and federal unemployment taxes ($3,300). Employees were paid in cash, but these payments and the corresponding payroll deductions and employer taxes have not yet been recorded. b. Collected rent revenue of $6,000 on December 10 for office space that Riverside rented to another business. The rent collected was for 30 days from December 11 to January 10 and was credited in full to Unearned Rent Revenue.Explanation / Answer
Date Account Title Debit Credit Dec. 31 Salaries Expenses 2,33,300 FICA Payable 30,000 FICA Payable (matching) 30,000 United Way Payable 6,000 Fed. Unemployment tax payable 3,300 Employee income tax payable 23,000 Accrued Payroll Payable 1,71,000 So Total Payroll Tax Expenses Payable FICA Payable 30,000 FICA Payable (matching) 30,000 United Way Payable 6,000 Fed. Unemployment tax payable 3,300 Employee income tax payable 23,000 Total Tax Liabilities 92,300 Date Account Title Debit Credit Dec. 31 Unearned Income 4,000 Rental Income 4,000 Working Notes: Rent Received for 30 days 6,000 Rent for 20 days will be credited to revenue 4,000 Rent for 10 days will remain in earned revenue 2,000 Report in the balance sheet River side Company Balance Sheet (Partial) As December 31 Current Liabilities Accrued Payroll 92,300 Unearned Rent Revenue 2,000
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