Question

On January 1, 2022, the ledger of Cullumber Company contained these liability accounts. Accounts Payable $45,000 Sales Taxes Payable 9,100 Unearned Service Revenue 21,500 During January, the following selected transactions occurred. Borrowed $18,000 in cash from Apex Bank on a 4-month,5%. $18,000 note. Sold merchandise for cash totaling $5,936, which includes 6% sales taxes. Performed services for customers who had made advance payments of $12,500. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2021. $9,100. 20 Sold 750 units of a new product on credit at $54 per unit, plus 6% sales tax. Jan. 1 5 12 14 During January, the company's employees earned wages of $52,000. Withholdings related to these wages were $3,978 for Social Security (FICA). $5,686 for federal income tax, and $1,706 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	$          5,936
	Sales Revenue		$         5,600
	Sales Tax Payable		$            336
Jan-12	Unearned Service Revenue	$        12,500
	Service Revenue		$      12,500
Jan-14	Sales Tax Payable	$          9,100
	Cash		$         9,100
Jan-20	Cash	$        42,930
	Sales Revenue		$      40,500
	Sales Tax Payable		$         2,430
Jan-31	Wages Expense	$        52,000
	FICA Taxes Payable		$         3,978
	Federal Income Tax Payable		$         5,686
	State Income Tax Payable		$         1,706
	Wages Payable		$      40,630
Jan-31	Payroll Tax Expense	$          3,978
	FICA Taxes Payable		$         3,978
Jan-31	Interest Expense	$               75
	Interest Payable		$              75

Balance Sheet (Partial)
January, 31
Current Liabilities
Accounts Payable	$          45,000
Sales Tax Payable	$             2,766
Unearned Service Revenue	$             9,000
Interest Payable	$                  75
Notes Payable	$          18,000
FICA Taxes Payable	$             7,956
Federal Income Taxes Payable	$             5,686
State Income Taxes Payable	$             1,706
Salaries and Wages Payable	$          40,630
Total Current Liabilities	$        130,819

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