Problem 10-1A On January 1, 2017, the ledger of Ivanhoe Company contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $42,900 6,800 19,400 During January, the following selected transactions occurred. Jan. 1 5 12 14 20 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. Sold merchandise for cash totaling $7,420, which includes 6% sales taxes. Performed services for customers who had made advance payments of $10,200. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2016, $6,800. Sold 540 units of a new product on credit at $47 per unit, plus 6% sales tax. During January, the company's employees earned wages of $70,900. Withholdings related to these wages were $5,424 for Social Security (FICA), $5,064 for federal income tax, and $1,519 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. Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 31 Interest Expense Interest Payable (To record the interest on outstanding notes payable.) Jan. 31 salaries and Wages Expense 70900 FICA Taxes Payable Federal Income Taxes Payable State Income Taxes Payable Salaries and Wages Payable (To record payroll and withholding taxes.) Jan. 31 Payroll Tax Expense FICA Taxes Payable (To record employer's payroll taxes.) Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable. IVANHOE COMPANY Balance Sheet (Partial) January 31, 2017 XP XU KUKU &T Judittinggi + X= Problem 10-1A On January 1, 2017, the ledger of Ivanhoe Company contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $42,900 6,800 19,400 During January, the following selected transactions occurred. Jan. 1 5 12 14 20 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. Sold merchandise for cash totaling $7,420, which includes 6% sales taxes. Performed services for customers who had made advance payments of $10,200. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2016, $6,800. Sold 540 units of a new product on credit at $47 per unit, plus 6% sales tax. During January, the company's employees earned wages of $70,900. Withholdings related to these wages were $5,424 for Social Security (FICA), $5,064 for federal income tax, and $1,519 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. Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 31 Interest Expense Interest Payable (To record the interest on outstanding notes payable.) Jan. 31 salaries and Wages Expense 70900 FICA Taxes Payable Federal Income Taxes Payable State Income Taxes Payable Salaries and Wages Payable (To record payroll and withholding taxes.) Jan. 31 Payroll Tax Expense FICA Taxes Payable (To record employer's payroll taxes.) Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable. IVANHOE COMPANY Balance Sheet (Partial) January 31, 2017 XP XU KUKU &T Judittinggi + X=
