1. Exercise 8-61 (Algorithmic) Recording Various Liabilities

   Glenview Hardware had the following transactions that produced liabilities during 2020:

   1. Purchased merchandise on credit for $30,000. (Note: Assume a periodic inventory system).
   2. Year-end wages of $18,000 incurred, but not paid. Related federal income taxes of $2,160, Social Security of $1,116 (employee portion), and Medicare taxes of $261 are withheld from employees.
   3. Year-end estimated income taxes payable, but unpaid, for the year in the amount of $42,850.
   4. Sold merchandise on account for $1,250, including state sales taxes of $60. (Note: Assume a periodic inventory system).
   5. Employer's share of Social Security and Medicare taxes for the period were $1,116 and $261, respectively.
   6. Borrowed cash under a 90-day, 9%, $25,000 note.

   Required:

   Prepare the entry to record each of these transactions (treat each transaction independently). If an amount box does not require an entry, leave it blank.

   a.	Accounts Payable Cash Inventory Purchases Sales Revenue
   	Accounts Payable Accounts Receivable Cash Purchases Sales Revenue
   	(Record purchase of inventory on account)
   b.	Federal Income Taxes Withholding Payable Medicare Taxes Expense Social Security Taxes Expense (Employer) Wages Expense Wages Payable
   	Accounts Receivable Federal Income Taxes Withholding Payable Income Taxes Expense Purchases Wages Expense
   	Accounts Payable Sales Taxes Payable (State) Social Security Taxes Expense (Employer) Social Security Taxes Payable (Employee) Wages Expense
   	Cash Medicare Taxes Expense Medicare Taxes Payable (Employee) Purchases Wages Expense
   	Cash Purchases Sales Taxes Payable (State) Wages Expense Wages Payable
   	(Record wages and liabilities)
   c.	Cash Income Taxes Expense Income Taxes Payable Income Tax Receivable Interest Expense
   	Cash Income Taxes Expense Income Taxes Payable Income Tax Receivable Interest Expense
   	(Record accrued income taxes)
   d.	Accounts Receivable Notes Payable Purchases Sales Revenue Sales Taxes Payable (State)
   	Accounts Payable Cash Income Taxes Expense Purchases Sales Taxes Payable (State)
   	Accounts Payable Accounts Receivable Cash Income Taxes Payable Sales Revenue
   	(Record sale)
   e.	Notes Payable Sales Revenue Sales Taxes Payable (State) Social Security Taxes Expense (Employer) Social Security Taxes Payable (Employer)
   	Cash Income Taxes Payable Medicare Taxes Expense Medicare Taxes Payable (Employee) Sales Taxes Expense (State)
   	Accounts Payable Income Taxes Expense Social Security Taxes Expense (Employer) Social Security Taxes Payable (Employer) Wages Payable
   	Medicare Taxes Expense Medicare Taxes Payable (Employer) Sales Revenue Wages Expense Wages Payable
   	(Record employer payroll taxes)
   f.	Accounts Payable Cash Notes Payable Sales Revenue Sales Taxes Payable (State)
   	Accounts Receivable Cash Notes Payable Purchases Sales Revenue
   	(Record issuance of note)

   2) chp 7

2. You have been hired by Patterson Planning Corp., an events planning company that recently had a fire in which some of the accounting records were damaged.

   In reviewing the fixed asset records, you find three depreciation schedules that are not labeled. They are listed in the following table. One of the assets has a depreciation rate of $4.40 per hour.

   Year

   Schedule A

   Schedule B

   Schedule C

   1

   $6,000.00

   $10,125.00

   $8,800.00

   2

   3,600.00

   13,500.00

   6,600.00

   3

   2,160.00

   13,500.00

   7,480.00

   4

   1,296.00

   13,500.00

   6,600.00

   5

   444.00

   3,375.00

   4,400.00

   6

   7,040.00

   7

   4,840.00

   8

   Total

   $13,500.00

   $54,000.00

   $45,760.00

   2)

   1. Determine which depreciation method is shown in each schedule on the Patterson Planning Corp. panel. Then match each schedule to the asset description that best characterizes the type of assets often depreciated using that method.

   Asset Description	Depreciation Schedule Used
   Asset with variable in-service time
   Asset producing steady revenues
   Asset generating greater revenues in the early years

   2. For each of the depreciation schedules shown on the Patterson Planning Corp. panel, fill in the following information. Leave any cells blank that cannot be determined from the depreciation schedule.

   	A	B	C
   Useful life
   Residual value
   Asset cost
   Total operating hours			3) Review the depreciation schedules on the Patterson Planning Corp. panel, then answer the following questions. 1. How would you adjust Schedule B if, at the beginning of Year 3, the asset was estimated to have 5 more years of life remaining, but with a residual value that was $2,000 lower? The total depreciation for this asset now will be . The depreciation amount for Year 3 will be . 2. What is the difference between the journal entries for discarding or selling a fixed asset? The journal entry to differs from the other entry because . 3. Complete the following sentences about depreciation. (A) When a fixed asset is fully depreciated it is if . (B) The balance of the Accumulated Depreciation account represents . (C) Depreciation measures .