Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed befow] The following transactions apply to Park Company for Year 1 : 1. Received $50,000

image text in transcribed
image text in transcribed
image text in transcribed
Required information [The following information applies to the questions displayed befow] The following transactions apply to Park Company for Year 1 : 1. Received $50,000 cash from the issue of common stock. 2. Purchased inventory on account for $180,000. 3. Sold inventory for $250,000 cash that had cost $140,000. Sales tax was collected at the rate of 5 percent on the inventory sold 4. Borrowed $50,000 from First State Bank on March 1, Year 1. The note had a 7 percent interest rate and a one-year term to maturity. 5. Paid the accounts payable (see transaction 2) 6. Paid the sales tax due on $199,000 of sales. Sales tax on the other $60,000 is not due until after the end of the year. 7. Salaries for the year for one employee amounted to $46,000. Assume the Sociai Security tax rate is 6 percent and the Medicare tax rate is 1.5 percent. Federal income tax withheld was $5,300 8. Paid $5,800 for warranty repairs on account during the yeat. 9. Paid $36,000 of other operating expenses during the year. 10. Paid a dividend of $2.000 to the shareholders. Adjustments: 11. The products sold in transaction 3 were warranted. Park estimated that the warranty cost would be 3 percent of sales. 12. Record the accrued interest at December 31, Year 1. 13. Record the accrued payroll tax at December 31, Year 1. Assume no poyroll taxes have been paid for the year and that the unemployment tax rate is 6 percent (federal unemployment tax rate is 0.6 percent and the state unemployment tax rate is 5.4 percent on the first $7,000 of earnings per employee). 2. Record the events under the accounting equation. The first two events are shown as examples. Required: Note: Round your answers to nearest whole dollar amount. Enter any decreases to account bolances with a minus sign. Not all cells require input. Required: 9. Record the events under the accounting equation. The first two events are shown as examples. Note: Round your answers to nearest whole dollor amount. Enter any decreoses to account balarices with a minus sign. Not all celis requite input. to a minus sign. Not all

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Accounting On Aix

Authors: IBM Redbooks

1st Edition

0738418501, 978-0738418506

More Books

Students also viewed these Accounting questions

Question

Stages of a Relationship?

Answered: 1 week ago