Chapter 12 Accounting for Payroll and Current Liabilities Case Study $250 $383 CS1 LO2345678 Fulton Electronics sells televisions and other electronics. All the electronics come with a default cne-year warranty against defects Warranty estimates are recorded every month. Fulton estimates that warranty repairs or replacements are 2% of the sales price. During September 2018, the following transactions occurred. The company uses the perpetual inventory system and operates in a state that has a sales tax rate of 6%. Sales tax amounts on purchases are added to the value of the item purchased. Sep 1 Purchased store fixtures for $300,000 plus sales tax. Since Fulton does not have the cash. It signed a three-year note payable with a rate of 5%. Payment of $50.000 plus interest is due each March 1 and September 1 until the note matures Sep 10 Incurred warranty costs of $500 to replace defective products sold last month. The waranty costs were taken from inventory Sep 14 Prepared the payroll for employees for the first half of the month. The actual payment will be made at a later date. Details of the payroll are shown below. Gross Pay 55.000 Federal Income Tax $500 State Income Tax FICA FUTA $30 SUTA $270 Sep 15 Cash sales for the first half of the month totaled $400,000 plus sales tax. Cost of goods sold was $240,000. Estimared warranty costs must also be recorded. There is no sales tax recorded on warranty Sep 15 Paid the amount of payroll owing to employees from September 14 Sep 20 Purchased inventory on account for $150.000 plus sales tax Sep 29 Prepared the payroll for employees for the second half of the month. The actual payment will be made at a later date. Details of the payroll are shown below. Gross Pay $6,000 $600 State Income Tax $300 FICA FUTA 536 SUTA $324 Sep 30 Sales for the second half of the month amount to $350,000 plus sales tax Cost of goods sold was $210,000. Estimared warranty costs must also be recorded. There is no sales tax recorded on warranty estimates Sep 30 Paid the amounts of payroll owing to employees from September 29. Paid the sales tax owing for the month of September Sep 30 Paid the payroll remittance for the amount owing from payroll for the month of September Sep 30 Accrued one month of interest on the note payable from September 1. estimates Federal Income Tax 5459 Sep 30 Chapter 12 Accounting for Payroll and Current Liabilities Required a) Complete Journal entries for the above transactions for the month of September 2018, Account Title and Explanation Date Debit Credit