Question

Problem 10-01A On January 1, 2022, the ledger of Carla Vista Co. contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $44,500 8,600 21,000 During January, the following selected transactions occurred. Jan. Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. 12 Sold merchandise for cash totaling $6,360, which includes 6% sales taxes. Performed services for customers who had made advance payments of $13,200. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2021, $8,600. Sold 700 units of a new product on credit at $46 per unit, plus 5% sales tax. 14 20 During January, the company's employees earned wages of $62,000. Withholdings related to these wages were $4,743 for Social Security (FICA), $5,486 for federal income tax, and $1,646 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.

Answer 1

Date	Account titles	Debit	Credit
Jan-01	Cash	$         18,000
	Notes Payable		$          18,000
Jan-05	Cash	$           6,360
	Sales Revenue		$            6,000
	Sales Tax Payable		$                360
Jan-12	Unearned Service Revenue	$         13,200
	Service Revenue		$          13,200
Jan-14	Sales Tax Payable	$           8,600
	Cash		$            8,600
Jan-20	Cash	$         33,810
	Sales Revenue		$          32,200
	Sales Tax Payable		$            1,610
Jan-31	Interest Expense	$                 75
	Interest Payable		$                  75
Jan-31	Wages Expense	$         62,000
	FICA Payable		$            4,743
	Federal Income Tax Payable		$            5,486
	State Income Tax Payable		$            1,646
	Wages Payable		$          50,125
Jan-31	Payroll Tax Expense	$           4,743
	FICA Payable		$            4,743

Balance Sheet
Current Liabilities
Accounts Payable	$         44,500
Sales Tax Payable	$           1,970
Unearned Service Revenue	$           7,800
Notes Payable	$         18,000
Interest Payable	$                 75
FICA Payable	$           9,486
Federal Income Tax Payable	$           5,486
State Income Tax Payable	$           1,646
Wages Payable	$         50,125
Total Current Liabilities	$      139,088