Problem 10-1A (Part Level Submission) On January 1, 2017, the ledger of Oriole C

Question

Problem 10-1A (Part Level Submission) On January 1, 2017, the ledger of Oriole Company contained these liability accounts Accounts Payable Sales Taxes Payable Unearned Service Revenue $43,000 6,850 19,500 During January, the following selected transactions occurred. Borrowed $18,000 in cash from Apex Bank on a 4-month, 596, $18,000 note. Sold merchandise for cash totaling $5,724, which includes 6% sales taxes. Performed services for customers who had made advance payments of $10,400. (Credit Service Revenue.) Paid state treasurer's department for sales taxes collected in December 2016, $6,850. Sold 550 units of a new product on credit at $45 per unit, plus 6% sales tax. Jan. 1 5 12 14 20 During January, the company's employees earned wages of $73,000. Withholdings related to these wages were $5,585 state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assum entry had been recorded for wages or payroll tax expense as of January 31. (a) Your answer is correct. Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. D presented in the problem. Round answers to nearest whole dollar amount, e.g. 5,275.) Date Account Titles and Explanation Debit Credit

Explanation / Answer

Date Account Title Debit Credit

Jan 31 Interest Expense 75

Interest Payable 75

(To record the interest on outstanding notes payable)

Calculation- ( 18000 x (5/100) x (1/12) ) = 75

Jan 31 Salaries and Wages Expense 73000

FICA Taxes Payable 5585

Federal Income Taxes Payable (a) Missing figure in question

State Income Taxes Payable (b) Missing figure in question

Salaries and Wages Payable Balance

(To record payroll and withholding taxes)

Note: Since the photo of the question is cropped, some values are missing. Put the amount of 'Federal Income Taxes Payable' and 'State Income Taxes Payable' from the question at the respective (a) and (b) missing figure mentioned in the solution above. Then, subtract 5585, federal income taxes payable and state income taxes payable from 73000. The balance will be Salaries and Wages Payable. Put the value at the balance place.

Jan 31 Payroll Tax Expense 5585

FICA Taxes Payable 5585

( To record employer's payroll taxes)

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