he Tusquittee Company completed the following transactions during the last quart
ID: 2570628 • Letter: H
Question
he Tusquittee Company completed the following transactions during the last quarter of 2018, its first year of operations: Oct. 1 Issued 25,000 shares of S1 par value common stock for cash of $10 per share. Issued a $200 ,000 10-year, 8% mortgage payable for land with an existing store building. Mortgage payments of $2,425 are due on the first day of each month, beginning November 1. The assets had the following market values: Land, $40,000; Building, $160,000. Issued aone-year, 10% note payable for $10,000 for store fixtures. The principal and interest 1 are due October 1, 2019. 3 15 31 Purchased merchandise inventory on account from Top Rate for $125,000, terms n/30. Paid $160 for utilities. Recorded cash sales for the month of $185,000 plus sales tax of 6%. The cost of the goods sold was $110,000 and estimated warranty payable was 8%. 31 Recorded October payroll and paid employees. 31 Accrued employer payroll taxes for October Nov. 1 3 10 12 15 15 16 17 Paid the first mortgage payment. Paid Top Rate for the merchandise inventory purchased on October 3. Purchased merchandise inventory on account from Top Rate for $150,000, terms n/30. Purchased 500 shares of treasury stock for $15 per share. Paid all liabilities associated with the October 31 payroll. Remitted (paid) sales tax from October sales to the state of North Carolina. Paid $6,000 to satisfy warranty claims. Declared cash dividends of $1 per outstanding share of common stock. Paid $245 for utilities. 18Explanation / Answer
A. Amortization table for 3 months
Month
Bal. Beginning
Interest
Total amount due
Instalment paid
Bal-ending
1
$2,00,000
$1,333
$2,01,333
$2,425
$1,98,908
2
$1,98,908
$1,326
$2,00,234
$2,425
$1,97,809
3
$1,97,809
$1,319
$1,99,128
$2,425
$1,96,703
B. Payroll register
Kate Jones
Month
Monthly salary
Deductions
Net payment
Federal Income tax
Health Insurance
OASDI
Medicare
Total deductions
Oct.
$6,000
$1,800
$300
$372
$87
$2,559
$3,441
Nov.
$6,000
$1,800
$300
$372
$87
$2,559
$3,441
Dec.
$6,000
$1,800
$300
$372
$87
$2,559
$3,441
Mary Smith
Month
Monthly salary
Deductions
Net payment
Federal Income tax
Health Insurance
OASDI
Medicare
Total deductions
Oct.
$5,000
$1,000
$300
$310
$73
$1,683
$3,318
Nov.
$5,000
$1,000
$300
$310
$73
$1,683
$3,318
Dec.
$5,000
$1,000
$300
$310
$73
$1,683
$3,318
Kate Jones
Month
Monthly salary
Deductions
Net payment
Federal Income tax
Health Insurance
OASDI
Medicare
Total deductions
Oct.
$3,000
$450
$300
$186
$44
$980
$2,021
Nov.
$3,000
$450
$300
$186
$44
$980
$2,021
Dec.
$3,000
$450
$300
$186
$44
$980
$2,021
C. Computations of Payroll taxes liability
Month
October
Employee
OASDI
Medicare
SUTA
FUTA
Total Payroll expense
Kate Jones
$372
$73
$324
$36
$805
Mary Smith
$310
$73
$270
$30
$683
Kate Jones
$186
$44
$162
$18
$410
Total
$868
$189
$756
$84
$1,897
Month
November
Employee
OASDI
Medicare
SUTA
FUTA
Total Payroll expense
Kate Jones
$372
$73
$54
$6
$505
Mary Smith
$310
$73
$108
$12
$503
Kate Jones
$186
$44
$162
$18
$410
Total
$868
$189
$324
$36
$1,417
Month
December
Employee
OASDI
Medicare
SUTA
FUTA
Total Payroll expense
Kate Jones
$372
$73
$0
$0
$445
Mary Smith
$310
$73
$0
$0
$445
Kate Jones
$186
$44
$54
$6
$443
Total
$868
$189
$54
$6
$1,332
A. Amortization table for 3 months
Month
Bal. Beginning
Interest
Total amount due
Instalment paid
Bal-ending
1
$2,00,000
$1,333
$2,01,333
$2,425
$1,98,908
2
$1,98,908
$1,326
$2,00,234
$2,425
$1,97,809
3
$1,97,809
$1,319
$1,99,128
$2,425
$1,96,703
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