Recording Various Liabilities

Glenview Hardware had the following transactions that produced liabilities during 2020:

1. Purchased merchandise on credit for $30,000. (Note: Assume a periodic inventory system.)
2. Year-end wages of $10,000 were incurred, but not paid. Related federal income taxes of $1,200, Social Security of $620 (employee portion), and Medicare taxes of $145 were withheld from employees.
3. Year-end estimated income taxes payable, but unpaid, for the year were $42,850.
4. Sold merchandise on account for $1,262, including state sales taxes of $48. (Note: Assume a periodic inventory system.)
5. Employer's share of Social Security and Medicare taxes for the period were $620 and $145, respectively.
6. Borrowed cash under a 90-day, 9%, $25,000 note.

Exercise 8-61 Recording Various Liabilities Glenview Hardware had the following transactions that produced liabilities during 2020: a. Purchased merchandise on credit for $30,000. (Note: Assume a periodic inventory system.) b. Year-end wages of $10,000 were incurred, but not paid. Related federal income taxes of $1,200, Social Security of $620 (employee portion), and Medicare taxes of $145 were withheld from employees. C. Year-end estimated income taxes payable, but unpaid, for the year were $42,850. d. Sold merchandise on account for $1,262, including state sales taxes of $48. (Note: Assume a periodic inventory system.) e. Employer's share of Social Security and Medicare taxes for the period were $620 and $145, respectively. f. Borrowed cash under a 90-day, 9%, $25,000 note. Required: Prepare the entry to record each of these transactions (treat each transaction independently). If an amount box does not require an entry, leave it blank. a. Purchases 30,000 Accounts Payable 30,000 (Record purchase of inventory on account) b. Wages Expense 10,000 Income Taxes Expense X 1,200 X 620 X Social Security Taxes Payable (Employee) Medicare Taxes Payable (Employee) ) Wages Payable 145 x 11,965 X (Record wages and liabilities) Income Taxes Expense 42,850 12,850 Income Taxes Payable (Record accrued income taxes) d. Accounts Payable x 1,262 Cash X 1,214 x Accounts Receivable x 48 X (Record sale) e. e Social Security Taxes Expense (Employer) 620 Medicare Taxes Payable (Employer) X 145 Social Security Taxes Payable (Employer) 620 Medicare Taxes Payable (Employer) 145 f. Cash 25,000 Notes Payable 25,000 (Record issuance of note)