Waterway Company balance sheet at December 31,2021, is presented below. Cash 38,400 Accounts Payable 17,600 Inventory 39,360
Question:
Waterway Company balance sheet at December 31,2021, is presented below.
Cash 38,400 Accounts Payable 17,600
Inventory 39,360 Interest Payable 320
Prepaid
Insurance 7,680 Notes Payable 64,000
Equipment 48,640 Owner's Capital 52,160
134,080 134,080
During January 2022, the following transactions occurred. (Waterway Company uses the perpetual inventory system)
1. Waterway paid 320 interest on the note payable on January 1, 2022. The note is due December 31,2023.
2. Waterway purchased 332,208 of inventory on account.
3. Waterway sold 563,200 cash, inventory which cost 339,200. Waterway also collected 36,608 in sales taxes.
4. Waterway paid 294,400 in accounts payable.
5. Waterway paid 21,760 in sales taxes to the state.
6. Paid other operating expenses of 38,400.
7. On January 31,2022, the payroll for the month consists of salaries and wages of 96,000. All salaries and wages are subject to 7.65% FICA taxes. A total of 11,440 federal income taxes are withheld. The salaries and wages are paid on February1.
Adjustment data:
8. Interest expense of 320 has been incurred in January on the notes payable.
9. The insurance for the year 2022 was prepaid on December 31, 2021.
10. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a 2,560 salvage value.
11. Employer's payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.6% federal unemployment tax,
(a) Prepare journal entries for the transactions listed above and the adjusting entries.
(b) Prepare an adjusted trial balance at January 31, 2022.
(c1) Prepare an income statement for the month ending January 31, 2022
(c2) Prepare an owner's equity statement for the month ending January 31, 2022
(c3) Prepare a classified balance sheet as of January 31, 2022
(Whoever answered this the first time answered it wrong)