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Exercise 12.3 (Algo) Preparing adjustments for uncollectible accounts, depreciation, and payroll items. LO 12-2 a. During the year 20X1, Sampson Company had net credit
Exercise 12.3 (Algo) Preparing adjustments for uncollectible accounts, depreciation, and payroll items. LO 12-2 a. During the year 20X1, Sampson Company had net credit sales of $1,080,000. Past experience shows that 0.6 percent of the firm's net credit sales result in uncollectible accounts. b. Equipment purchased by Park Consultancy for $29,320 on January 2, 20X1, has an estimated useful life of 9 years and an estimated salvage value of $1,600. What adjustment for depreciation should be recorded on the firm's worksheet for the year ended December 31, 20X1? c. On December 31, 20X1, Giant Plumbing Supply owed wages of $5,500 to its factory employees, who are paid weekly. d. On December 31, 20X1, Giant Plumbing Supply owed the employer's social security (6.2 percent) and Medicare (1.45 percent) taxes on the entire $5,500 of accrued wages for its factory employees. e. On December 31, 20X1, Giant Plumbing Supply owed federal (0.6 percent) and state (5.4 percent) unemployment taxes on the entire $5,500 of accrued wages for its factory employees. For each of the above independent situations, prepare the adjusting entries that must be made on the December 31, 20X1, worksheet. (Round your answers to 2 decimal places.)
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