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Problem 4. In providing accounting services to small business, you encounter the following situations pertaining to cash sales. (1) Kushner Company rings up sales and
Problem 4. In providing accounting services to small business, you encounter the following situations pertaining to cash sales. (1) Kushner Company rings up sales and sales taxes separately on its cash register. On April 10 the register totals are sales $40,000 and sales taxes $2,800. (2) Grant Company does not segregate sales and sales taxes. Its register total for April 15 is $22,260, which includes a 6% sales tax. Instructions Prepare the entries to record the sales transactions and related taxes for (a) Kushner Company and (b) Grant Company Problem 5 During the month of March, Preston Company's employees earned wages of $90,000. Withholdings related to these wages were $6,885 for Social Security (FICA), $14,200 for federal income tax $6,200 for state income tax, and $600 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $1,300 for state unemployment tax Instructions (a) Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April (b) Prepare the entry to record the company's payroll tax expense
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