Question

PA10-3 Recording and Reporting Current Liabilities (LO 10-2] Lakeview 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 ($92,000), payroll deductions for income tax ($9,200), payroll deductions for FICA ($6,900), payroll deductions for American Cancer Society ($3,450), employer contributions for FICA (matching), and state and federal unemployment taxes ($805). Employees were paid in cash, but payments for the corresponding payroll deductions have not yet been made and employer taxes have not yet been recorded. b. Collected rent revenue of $6,225 on December 10 for office space that Lakeview rented to another business. The rent collected was for 30 days from December 12 to January 10 and was credited in full to Deferred Revenue. Required: 1. & 2. Prepare the journal entries to record payroll on December 31, the collection of rent on December 10 and adjusting journal entry on December 31. 3. Show how any of the liabilities related to these items should be reported on the company's balance sheet at December 31.

Answer 1

all the respective entries in image below

|ВОOKS OF LAKEVIEW JOURNAL ENTRY FOR WAGES DEBIT CREDIT WAGES AC INCOME |ТAX FICA CANCER SOCY To cash account 92,000 Dec-31 9,200 6,900 3,450 72,450 payroll taxexpenses employer contribtion Dec-31 9,200 fica 805 unemploy To Tax Payables 10,005 Collection of rent Dec-31 Bank 6,225 to rent 6,225 income adjustment of rent rent income debit (1/3) To deferred rent income Dec-31 2,075 2,075 Balance sheetas at Lakeview Dec 31 Partial (Liability side only) INCOME ТAX FICA CANCER SOCY 9,200 6,900 3,450 9,200 805 fica unemploy Deferred Income 2,075