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.

image text in transcribed

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.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting Tools For Business Decision Making

ISBN: 9781119791089

10th Edition

Authors: Paul D. Kimmel,  Jerry J. Weygandt,  Jill E. Mitchell

Question Posted: