Question

Problem 10-01A (Part 1) On January 1, 2022, the ledger of Sandhill Co. contained these liability accounts. Accounts Payable $43,500 Sales Taxes Payable 7,600 Unearned Service Revenue 20,000 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 $5,300, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $10,600. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $7,600. 20 Sold 600 units of a new product on credit at $46 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $86,000. Withholdings related to these wages were $6,579 for Social Security (FICA), $5,207 for federal income tax, and $1,562 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 Credit choose a transaction date Jan. 1Jan. 5Jan. 12Jan. 14Jan. 20Jan. 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Jan. 1Jan. 5Jan. 12Jan. 14Jan. 20Jan. 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Jan. 1Jan. 5Jan. 12Jan. 14Jan. 20Jan. 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Jan. 1Jan. 5Jan. 12Jan. 14Jan. 20Jan. 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Jan. 1Jan. 5Jan. 12Jan. 14Jan. 20Jan. 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

List Of Accounts

Problem 10-01A

Accounts Payable Accounts Receivable Accumulated Depreciation-Equipment Accrued Pension Liability Bonds Payable Buildings Cash Common Stock Cost of Goods Sold Current Portion of Long-Term Debt Depreciation Expense Discount on Bonds Payable Dividends Equipment Federal Income Taxes Payable Federal Unemployment Taxes Payable FICA Taxes Payable Gain on Bond Redemption Income Tax Expense Income Taxes Payable Insurance Expense Interest Expense Interest Payable Inventory Land Loss on Bond Redemption Mortgage Payable No Entry Notes Payable Other Operating Expenses Payroll Tax Expense Premium on Bonds Payable Prepaid Insurance Property Taxes Payable Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Sales Revenue Sales Taxes Payable Service Revenue Share Premium-Conversion Equity State Income Taxes Payable State Unemployment Taxes Payable Subscription Revenue Ticket Revenue Unearned Rent Revenue Unearned Sales Revenue Unearned Service Revenue Unearned Subscription Revenue Unearned Ticket Revenue Union Dues Payable Warranty Liability

Answer 1

Journal Entries:

Date	Account Titles and Explanations	Debit	Credit
Jan. 1, 2022	Cash	$18,000
	5% Notes Payable		$18,000
	(To record the amount borrowed by issuing 5% note for cash)
Jan. 5, 2022	Cash ($5,300 + $318)	$5,618
	Sales Taxes Payable ($5,300*6/100)		$318
	Sales Revenue		$5,300
	(To record the cash sales along with sales tax payable)
Jan. 12, 2022	Unearned Service Revenue	$10,600
	Service Revenue		$10,600
	(To record the services revenue earned by proving the services)
Jan. 14, 2022	Sales Taxes Payable	$7,600
	Cash		$7,600
	(To record the payment of sales taxes to the department)
Jan. 20, 2022	Accounts Receivable ($27,600 + $1,656)	$29,256
	Sales Revenue (600 units * $46 per unit)		$27,600
	Sales Taxes Payable ($27,600*6/100)		$1,656
	(To record the sales made on account along with collection of sales tax)
January	Salaries and Wages Expenses	$86,000
	FICA - Social Security Taxes Payable		$6,579
	Federal Income Taxes Payable		$5,207
	State Unemployment Taxes Payable		$1,562
	Salaries and Wages Payable ($86,000 - $6,579 - $5,207 - $1,562)		$72,652
	(To record the payroll tax expenses)