Chapter 9 Comp Problem 11

Please tell me how to journalize "" Nov 30, Dec 14, Dec 31."" Selected transactions of Shadrach Computer Corporation during November and December of 2019 are as follows:

November Transactions:

Nov. 1 Borrowed money from the bank by issuing a non-interest-bearing, $40,000, 90-day note. The note is discounted on a 12% basis.

9 Sold 100 computers with a 1-year assurance-type warranty for $5,000 each on credit (ignore cost of goods sold). Past experience indicates that warranty costs average $125 per computer.

12 Sold 100 software packages at $300 each on credit (ignore cost of goods sold). With each software package, Shadrach offered a premium in the form of a USB drive for the return of one proof of purchase. The offer expires June 30, 2020. The cost of each USB drive is $5, and Shadrach estimates that 80% of the premiums will be redeemed; therefore, 80 USB drives were purchased on credit.

20 Paid $2,900 in fulfillment of the warranty agreement on several of the computers sold on November 9.

30 Accrued monthly vacation pay. Shadrach has 90 employees who are each paid an average of $160 per day. Shadrach has a policy of allowing each employee 12 days paid vacation per year; the related liability is recorded on a monthly basis. Employees are paid monthly.

30 Paid monthly payroll. Gross salaries were $432,000. No vacations were taken during November. Income tax withholdings of 20% are applicable to the salaries of all employees. A F.I.C.A. tax of 8% for both employees and employers is also applicable to the entire amount of gross salaries. These rates apply to all salaries because no employees salary has exceeded the maximum wage limit. The state allows the corporation a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. Prior to October, each individual employee had accumulated a gross salary in excess of $7,000 for 2019. December Transactions:

Dec. 14 Twenty proofs of purchase were returned from the November 12 sale.

29 An individual filed suit against Shadrach for damages caused in a November 5 accident that resulted when a member of the sales force hit the individuals car while on personal business. The amount of the suit filed was $1,500. Because the employee was on personal business, the companys insurance company will not pay the claim. In Shadrachs attorneys opinion, the amount of the suit is reasonable; furthermore, the company believes it is likely to lose the suit.

31 Accrued monthly vacation pay.

31 Paid monthly payroll. Gross salaries were $435,000. The salaries included $6,800 of vacation pay in the sales force and $3,200 of vacation pay in the office staff. The F.I.C.A. tax rate still applies to all wages because no employees salary exceeded the maximum wage limit.

31 Recorded presidents bonus. The president receives a 10% bonus on any income over $200,000, before deducting income taxes and the bonus. Shadrachs effective income tax rate is 21%, and income before income taxes and bonus for 2019 was $560,000. The bonus will be paid in January 2020. Required: Prepare journal entries to record the preceding transactions of Shadrach Computer Corporation for 2019. Include year-end accruals.

CHART OF ACCOUNTS

ASSETS

Cash

Accounts Receivable

Inventory of Premiums

Prepaid Insurance

Equipment

Accumulated Depreciation

	REVENUE
	Sales

EXPENSES

Cost of Goods Sold

Insurance Expense

Utilities Expense

Salaries Expense

Payroll Taxes Expense

Bad Debt Expense

Interest Expense

Depreciation Expense

Warranty Expense

Premium Expense

Miscellaneous Expenses

Loss from Accident

Income Tax Expense

LIABILITIES

Accounts Payable

Bonus Payable

Liability for Compensated Absences

FICA Taxes Payable

Federal Income Taxes Withholding Payable

Salaries Payable

Estimated Warranty Liability

Estimated Premium Liability

Estimated Liability from Lawsuit

Unearned Revenue

Notes Payable

Discount on Notes Payable

Income Taxes Payable

EQUITY

Common Stock

Retained Earnings

The first journal page has 23 entry rows.

The second journal has 19 entry rows.

General Journal NOV. 9 Shaded cells have feedbac 500,000.00 Accounts Receivable 5 500,000.00 6 12,500.00 7 12,500.00 8 30,000.00 Sales Nov.9 Warranty Expense Estimated Warranty Liability Nov. 12Accounts Receivable Sales Nov. 12 Premium Expense Estimated Premium Liability Nov. 20. Estimated Warranty Liability 30,000.00 10 400.00 11 400.00 12 2,900.00 13 Cash 2,900.00 14 14,400.00 15 14,400.00 Nov. 30 Salaries Expense Liability for Compensated Absences Nov. 30 Salaries Expense Federal Income Taxes Withholding Payable 16 432,000.00 17 86,400.00 18 FICA Taxes Payable 34,560.00 19 Cash 311,040.00 20 34,560.00 Nov. 30 Payroll Taxes Expense FICA Taxes Payable 21 34,560.00 General Journal Shaded cells have feedbacl DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 100.00 2 100.00 3 1,500.00 4 1,500.00 5 Dec. 14 Inventory of Premiums Cash Dec. 29 Loss from Accident Estimated Liability from Lawsuit Dec. 31. Salaries Expense Liability for Compensated Absences Dec. 31 Salaries Expense Federal Income Taxes Withholding Payable FICA Taxes Payable 14,400.00 6 14,400.00 7 425,000.00 8 85,000.00 9 34,000.00 10 Cash 306,000.00 11 34,000.00 12 34,000.00 Dec. 31 Payroll Taxes Expense FICA Taxes Payable Dec. 31 Salaries Expense Bonus Payable 13 36,000.00 14 36,000.00 15 Dec. 31 Interest Expense 789.00 16 Discount on Notes Payable 789.00 General Journal NOV. 9 Shaded cells have feedbac 500,000.00 Accounts Receivable 5 500,000.00 6 12,500.00 7 12,500.00 8 30,000.00 Sales Nov.9 Warranty Expense Estimated Warranty Liability Nov. 12Accounts Receivable Sales Nov. 12 Premium Expense Estimated Premium Liability Nov. 20. Estimated Warranty Liability 30,000.00 10 400.00 11 400.00 12 2,900.00 13 Cash 2,900.00 14 14,400.00 15 14,400.00 Nov. 30 Salaries Expense Liability for Compensated Absences Nov. 30 Salaries Expense Federal Income Taxes Withholding Payable 16 432,000.00 17 86,400.00 18 FICA Taxes Payable 34,560.00 19 Cash 311,040.00 20 34,560.00 Nov. 30 Payroll Taxes Expense FICA Taxes Payable 21 34,560.00 General Journal Shaded cells have feedbacl DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 100.00 2 100.00 3 1,500.00 4 1,500.00 5 Dec. 14 Inventory of Premiums Cash Dec. 29 Loss from Accident Estimated Liability from Lawsuit Dec. 31. Salaries Expense Liability for Compensated Absences Dec. 31 Salaries Expense Federal Income Taxes Withholding Payable FICA Taxes Payable 14,400.00 6 14,400.00 7 425,000.00 8 85,000.00 9 34,000.00 10 Cash 306,000.00 11 34,000.00 12 34,000.00 Dec. 31 Payroll Taxes Expense FICA Taxes Payable Dec. 31 Salaries Expense Bonus Payable 13 36,000.00 14 36,000.00 15 Dec. 31 Interest Expense 789.00 16 Discount on Notes Payable 789.00