Sandler Company completed the following two transactions. The annual accounting

Question

Sandler Company completed the following two transactions. The annual accounting period ends December 31 a. On December 31, calculated the payroll, which indicates gross earnings for wages ($440,000), payroll deductions for income tax ($46,000), payroll deductions for FICA ($38,000), payroll deductions for United Way ($5,800), employer contributions for FICA (matching) and state and federal unemployment taxes ($3,800). Employees were paid in cash, but payments for the corresponding payroll deductions have not been made and employer taxes have not yet been recorded b. Collected rent revenue of $2,040 on December 10 for office space that Sandler rented to another business. The rent collected was for 30 days from December 11 to January 10 and was credited in full to Unearned Revenue Required 1. & 2. Complete the required journal entries for the above transactions as shown below: (i) Prepare the entries required on December 31 to record payroll (ii) Prepare the journal entry for the collection of rent on December 10 (iii) Prepare the adjusting journal entry on December 31 (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 4 Record the payroll tax expense Note: Enter debits before credits Date General Journal Debit Credit December 31 Record entry Clear entry View general journal 3. Show how any liabilities related to these items should be reported on the company's balance sheet at December 31. (Do not round intermediate calculations.)

Explanation / Answer

1) Following Journal entries are required to record Payroll

Date Journal Entry Debit Credit

31st Dec Wages Expense 440000

Withheld Income Tax Payable 46000

FICA Payable 38000

United Pay payable 5800

Cash Payable 350200

31st Dec Payroll Tax Expense 41800

FICA Payable 38000

State & Federal Unemployment Taxes Payable 3800

2) 31st Dec Cash 2040

Unearned Rent Revenue 2040

3) Unearned Rent Revenue 1360

Rent Revenue 1360

4) Current Liabilities:

Accrued Payable(46000+38000+5800+41800) 131600

Unearned Rent Revenue 680

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