Question

On January 1, 2022, the ledger of Oriole Company contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $44,100 8,200 20,600 During January, the following selected transactions occurred. Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, 518,000 note. 5 Sold merchandise for cash totaling $5,936, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $11,700. (Credit Service Revenue.) 14 Paid state treasurer's department for sales taxes collected in December 2021, $8,200. 20 Sold 660 units of a new product on credit at 550 per unit, plus 6% sales tax. During January, the company's employees eamed wages of $98,000. Withholdings related to these wages were $7,497 for Social Security (FICA), $5,229 for federal income tax, and $1,569 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. Joumalize 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

Answer 1

1) Credit Journal Entries: Date Account Titles and Explanation Jan. 1 Cash Notes Payable (To record borrowed cash from bank) Debit $18.000 $18.000 Jan. 5 $5,936 Cash Sales Revenue Sales Tax Payable ($5,936 * 6/106) (To record sale merchandise on cash) $5,600 $336 Jan. 12 Unearned Service Revenue $11,700 Service Revenue (To record advance payment received against service revenue) $11,700 Jan. 14 Sales Tax Payable $8.200 Cash $8,200 (To record Paid state treasurer's department for sales taxes collected) Jan. 20 $34.980 Accounts Receivable Sales Revenue Sales Tax Payable ($33,000 * 6/100) (To record sale merchandise on account) $33.000 $1.980 2) Credit Journalize adjusting Entries: Date Account Titles and Explanation Debit Jan. 31 Interest Expense ($18.000 * 5%* 1/12) $75 Interest Payable (To record the interest on outstanding notes payable) $75 Jan. 31 $98.000 Salaries And Wages Expenses FICA Taxes Payable Federal Income Taxes Payable State Income Taxes Payable Salaries and Wages Payable (To record payroll and withholding taxes) $7.497 $5,229 $1,569 $83,705 Jan. 31 $7.497 Payroll Taxes Expenses FICA Taxes Payable (To record employers payroll taxes) $7,497 3) ORIOLE COMPANY Balance Sheet (Partial) As of the end of the month January 31, 2022 Current Liabilities Accounts Payable Sales Taxes Payable ($8,200 + $336 + $1980 - $8,200) Unearned Service Revenue ($20,600 - $11.700) Notes Payable Interest Payable FICA Taxes Payable Federal Income Taxes Payable State Income Taxes Payable Salaries and Wages Payable Total Current Liabilities $44.100 $2,316 $8.900 $18,000 $75 $14.994 $5,229 $1,569 $83,705 $178,888