Problem 10-1A (Part Level Submission)

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

Accounts Payable		$44,200
Sales Taxes Payable		7,450
Unearned Service Revenue		20,700

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 $6,678, which includes 6% sales taxes.
12		Performed services for customers who had made advance payments of $12,100. (Credit Service Revenue.)
14		Paid state treasurers department for sales taxes collected in December 2016, $7,450.
20		Sold 670 units of a new product on credit at $55 per unit, plus 6% sales tax.

During January, the companys employees earned wages of $71,300. Withholdings related to these wages were $5,454 for Social Security (FICA), $5,093 for federal income tax, and $1,528 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 January transactions. (Credit account titles are automatically indented when amount answers to nearest whole dollar amount, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 v Cash 18,000 Notes Payable 18,000 Jan. 5 > Cash 6,678 x Sales Revenue 6,293 X Sales Taxes Payable 385 Jan. 12 Unearned Service Revenue 12,100 Service Revenue 12,100 Jan. 14 Sales Taxes Payable 7,450 Cash 7,450 Jan. 20 Accounts Receivable 39,061 Sales Revenue 36,850 Sales Taxes Payable 2,211 (b) Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense. 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 (To record payroll and withholding taxes.) Jan. 31 (To record employer's payroll taxes.)