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On January 1, 2007, the ledger of Daniels Company contained these liability accounts. Accounts Payable $42,500 Sales Tax payable 6,600 Unearned Service Revenue 19,000 During
On January 1, 2007, the ledger of Daniels Company contained these liability accounts. Accounts Payable $42,500 Sales Tax payable 6,600 Unearned Service Revenue 19,000 During January the following selected transactions occurred: January 1 - Borrowed 12,000 in cash from Midland Bank on a 4-month, 8%, $12,000 note. January 5-Sold Merchandise for cash totaling $6,510, which includes 5% sales tax January 12-Provided services for customers who had made advance payments of 10,000(Credit Service Revenue) January 14-Paid State Treasurer's department for sales tax collected in December 2006, $6,600 January 20-Sold 500 units of a new product on credit for $48 per unit plus 5% sales tax. During January the Company's employees earned wages of 60,000. Withholdings related to these wages were $4,590 for Social Security (FICA), 5,000 for federal income tax, and 1,500 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31. a. journalize the January transactions. b. Journalize the adjusting entries at January 31, 2015 for the outstanding note payable and for wages expense and payroll tax expense. c. Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in Accounts Payable
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