$10$

Part $1$ of $3$

$4\mathrm{.}28$ points

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$[$I he following intormation applies to the questions displayed below.$]$

The following transactions apply to Park Company for Year $1$:

Received $$31,000$ cash from the issue of common stock.

Purchased inventory on account for $$143,000.$

Sold inventory for $$172,500$ cash that had cost $$105,500.$ Sales tax was collected at the rate of $8$ percent on the inventory sold.

Borrowed $$24,000$ from First State Bank on March $1,$ Year $1.$ The note had a $8$ percent interest rate and a one$-$year term to maturity.

Paid the accounts payable $($see transaction $2).$

Paid the sales tax due on $$153,500$ of sales. Sales tax on the other $$19,000$ is not due until after the end of the year.

Salaries for the year for one employee amounted to $$28,000.$ Assume the Social Security tax rate is $6$ percent and the Medicare tax rate is $1\mathrm{.}5$ percent. Federal income tax withheld was $$5,300.$

Paid $$2,600$ for warranty repairs during the year.

Paid $$12,000$ of other operating expenses during the year.

Paid a dividend of $$5,000$ to the shareholders.

Adjustments:

$11.$ The products sold in transaction $3$ were warranted. Park estimated that the warranty cost would be $6$ percent of sales.

$12.$ Record the accrued interest at December $31,$ Year $1.$

$13.$ Record the accrued payroll tax at December $31,$ Year $1.$ Assume no payroll taxes have been paid for the year and that the unemployment tax rate is $6\mathrm{.}0$ percent $($federal unemployment tax rate is $0\mathrm{.}60$ percent and the state unemployment tax rate is $5\mathrm{.}40$ percent on the first $$7,000$ of earnings per employee$).$

Exercise $9-13$A $($Algo$)$ Part a

Required:

a$.$ Record the preceding transactions in general journal form. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$