Question
On January 1, 2017, the ledger of Sheridan Company contained these liability accounts. Accounts Payable $43,200 Sales Taxes Payable 6,950 Unearned Service Revenue 19,700 During
On January 1, 2017, the ledger of Sheridan Company contained these liability accounts.
Accounts Payable $43,200
Sales Taxes Payable 6,950
Unearned Service Revenue 19,700
During January, the following selected transactions occurred.
Jan. 1 Borrowed $18,000in cash from Apex Bank on a 4-month,5%, $18,000note.
5 Sold merchandise for cash totaling $5,936, which includes6% sales taxes.
12 Performed services for customers who had made advance payments of $10,300. (Credit Service Revenue.)
14 Paid state treasurer's department for sales taxes collected in December 2016, $6,950.
20 Sold570units of a new product on credit at $52per unit, plus6% sales tax.
During January, the company's employees earned wages of $78,800. Withholdings related to these wages were $6,028for Social Security (FICA), $5,629for federal income tax, and $1,689for 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.
- Journalize the January transactions.
- Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense.
- Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable.
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