On January 1, 2025, the ledger of Romada Company contained these liability accounts. During January, the following
Question:
On January 1, 2025, the ledger of Romada Company contained these liability accounts.
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 \(\$ 6,254\), which includes \(6 \%\) sales taxes.
12 Performed services for customers who had made advance payments of \(\$ 10,000\). (Credit Service Revenue.)
14 Paid state treasurer's department for sales taxes collected in December 2024, \(\$ 6,600\).
20 Sold 500 units of a new product on credit at \(\$ 48\) per unit, plus \(6 \%\) sales tax.
During January, the company's employees earned wages of \(\$ 70,000\). Withholdings related to these wages were \(\$ 5,355\) for FICA, \(\$ 5,000\) for federal income tax, and \(\$ 1,500\) 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.
Instructions
a. Journalize the January transactions.
b. Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense.
c. Prepare the current liabilities section of the balance sheet at January 31, 2025. Assume no change in Accounts Payable.
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9781119791089
10th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell