Requirement 1a.

The

LattimoreLattimore

Company is a retail company that began operations on

OctoberOctober

1,

20182018 ,

when it incorporated in the state of North Carolina. The

LattimoreLattimore

Company is authorized to issue

150 comma 000150,000

shares of $1 par value common stock and

60 comma 00060,000

shares of6 %$40par value preferred stock. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. Customers are charged a77 %state sales tax. The company uses a perpetual inventory system. There are three employees that are paid a monthly salary on the last day of the month.

In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgage payable issued on

OctoberOctober

1. Round interest calculations to the nearest dollar.

	Beginning	Principal	Interest	Total	Ending
	Balance	Payment	Expense	Payment	Balance
10/01/2018					$320,000
11/1/2018	$320,000	$2,667	$1,333	$4,000	$317,333
12/1/2018	317,333	2,678	1,322	4,000	314,655
01/01/2019	314,655	2,689	1,311	4,000	311,966

Requirement 1b. In preparation for recording the transactions, prepare: Payroll registers for

OctoberOctober ,

NovemberNovember ,

and

DecemberDecember.

All employees worked

OctoberOctober

1 through

DecemberDecember

31 and are subject to the following FICA taxes: OASDI:

6.26.2 %

on first

$ 118 comma 500$118,500

earned; Medicare:

1.451.45 %

up to

$ 200 comma 000$200,000 ,

2.352.35 %

on earnings above

$ 200 comma 000$200,000.

Begin by preparing the payroll register for

OctoberOctober.

(Round all amounts to the nearest cent. Complete all answer boxes. Enter a "0" for any zero balances. Abbreviations used: Beg. = Beginning; Cum. = Cumulative; Earn. = Earnings; Med. = Medicare; Ins. = Insurance; With. = Withholdings.)

	Earnings			Withholdings
	Beg.	Current	Ending
	Cum.	Period	Cum.			Income	Health	Total	Net
Employee	Earn.	Earnings	Earn.	OASDI	Med.	Tax	Ins.	With.	Pay
Jenning
Shepard
Morgan

Enter any number in the edit fields and then click Check Answer.

Remitted (paid) sales tax from October sales to the state of North Carolina Paid $2,500 to satisfy warranty claims Declared cash dividends of $1 per outstanding share of common stock. Paid $260 for utilities Paid the cash dividends Recorded cash sales for the month of $190,000 plus sales tax of 7%. The cost of the goods sold was $114,000 and estimated warranty payable was 6% Recorded November payroll and paid employees Accrued employer payroll taxes for November Paid the second mortgage payment. Paid Elite Supply for the merchandise inventory purchased on November 10 Paid $7,300 to satisfy warranty claims Sold 200 shares of treasury stock for $16 per share Paid all liabilities associated with the November 30 payroll Remitted (paid) sales tax from November sales to the state of North Carolina Paid $210 for utilities 15 16 17 18 27 30 30 30 c. 1 10 12 15 15 15 18 Remitted (paid) sales tax from October sales to the state of North Carolina Paid $2,500 to satisfy warranty claims Declared cash dividends of $1 per outstanding share of common stock. Paid $260 for utilities Paid the cash dividends Recorded cash sales for the month of $190,000 plus sales tax of 7%. The cost of the goods sold was $114,000 and estimated warranty payable was 6% Recorded November payroll and paid employees Accrued employer payroll taxes for November Paid the second mortgage payment. Paid Elite Supply for the merchandise inventory purchased on November 10 Paid $7,300 to satisfy warranty claims Sold 200 shares of treasury stock for $16 per share Paid all liabilities associated with the November 30 payroll Remitted (paid) sales tax from November sales to the state of North Carolina Paid $210 for utilities 15 16 17 18 27 30 30 30 c. 1 10 12 15 15 15 18