Problem 10-1A (Part Level Submission)

On January 1, 2017, the ledger of Sheridan Company contained these liability accounts.

Accounts Payable		$44,300
Sales Taxes Payable		7,500
Unearned Service Revenue		20,800

During January, the following selected transactions occurred.

Jan. 1		Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.
5		Sold merchandise for cash totaling $6,254, which includes 6% sales taxes.
12		Performed services for customers who had made advance payments of $12,500. (Credit Service Revenue.)
14		Paid state treasurers department for sales taxes collected in December 2016, $7,500.
20		Sold 680 units of a new product on credit at $53 per unit, plus 6% sales tax.

During January, the companys employees earned wages of $70,300. Withholdings related to these wages were $5,378 for Social Security (FICA), $5,021 for federal income tax, and $1,506 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. 1 Cash 18000 Notes Payable 18000 Jan. 5 |Cash 6254 Sales Revenue 5900 Sales Taxes Payable 354 Jan. 12 Unearned Service Revenue 12500 Service Revenue 12500 Jan. 14Ss Taxes Payable 7500 Cash 7500 Jan. 20 Accounts Receivable 38202 Sales Revenue 36040 Sales Taxes Payable 2162 Date Account Titles and Explanation Debit Credit Jan. 31 Salaries and Wages Expense Salaries and Wages Payable (To record the interest on outstanding notes payable.) Jan. 31 (To record payroll and withholding taxes.) Jan. 31 (To record employer's payroll taxes.)