Sales-related transactions using perpetual inventory system Payroll accounts and
ID: 2600677 • Letter: S
Question
Sales-related transactions using perpetual inventory system
Payroll accounts and year-end entries
The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:
Account No.
Account Name
Balance
The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:
On page 10 of the journal:
On page 11 of the journal:
1. Journalize the transactions on pages 10 and 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 11 and 12 of the journal.
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The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
Record on page 11 of the journal
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.
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ACCOUNTING EQUATION
Score: 116/400
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Points:
22.91 / 79
Question not attempted.
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ACCOUNTING EQUATION
Score: 0/226
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0 / 45
Check My Work
Journalize these transactions from the seller's perspective using the perpetual inventory system. Discounts are given on the amount owed by the buyer, except for any freight costs.
Mar. 2: Note that FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver. Discounts are given on the amount owed by the buyer, except for any freight costs. Keep in mind that two entries are required for this transaction: (1) for the sale on account and (2) for the cost of the merchandise sold (expense) and inventory reduction on the seller's records.
Mar. 3: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 4: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 5: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 12: Since the invoice was paid within the discount period, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the difference between the invoice and the discount.
Mar. 14: Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 16: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 18: Customer Refunds Payable is debited while the credit is applied to the buyer's Account Receivable. A second entry increases Inventory and credits Estimated Returns Inventory for the return cost.
Mar. 19: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver, so credit cash for the added freight. Three entries are required: (1) for the sale on account, (2) for the prepaid freight added to the invoice, and (3) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 26: The return of merchandise reduces the original invoice amount paid by the buyer.
Mar. 28: Since no discount is given on freight, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the invoice amount less the discount amount, plus the prepaid freight.
Mar. 31: Since no discounts are allowed, no discounts are recorded. The cash paid on account is equal to the invoice.
Mar. 31: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.
Apr. 3: Record the service fee as an expense.
Apr. 15: Since all sales taxes from customer transactions are recorded as a liability, Sales Tax Payable must be debited when they are paid to the state in cash.
Account No.
Account Name
Balance
211 Salaries Payable — 212 Social Security Tax Payable $9,273 213 Medicare Tax Payable 2,318 214 Employees Federal Income Tax Payable 15,455 215 Employees State Income Tax Payable 13,909 216 State Unemployment Tax Payable 1,400 217 Federal Unemployment Tax Payable 500 218 Bond Deductions Payable $ 3,400 219 Medical Insurance Payable 27,000 411 Operations Salaries Expense 950,000 511 Officers Salaries Expense 600,000 512 Office Salaries Expense 150,000 519 Payroll Tax Expense 137,951Explanation / Answer
Garcon Co.
Please check the exact account title per the chart of accounts since the same is not provided with the question.
Please post independent questions separately. Thank you.
Date General Journal Debit Credit Page 10 Dec. 2 Bond Deductions payable 3400 Cash 3400 (To record payment for purchase of bonds) Dec. 2 Social security tax payable 9273 Medicare tax payable 2318 Employees federal income tax payable 15455 Cash 27046 (To record payment of payroll liabilities) Dec. 13 Operations salaries expense 43200 Officers salaries expense 27200 Office salaries expense 6800 Social security tax payable 4632 Medicare tax payable 1158 Employees federal income tax payable 15440 Employees state income tax payable 3474 Bond Deductions payable 1700 Medical insurance payable 4500 Salaries payable 46296 (To record biweekly payroll) Dec. 13 Salaries payable 46296 Cash 46296 (To record payment of biweekly payroll) Dec. 13 Payroll tax expense 6265 Social security tax payable 4632 Medicare tax payable 1158 State unemployment tax payable 350 Federal unemployment tax payable 125 (To record biweekly payroll tax expense) Dec. 16 Social security tax payable 9264 Medicare tax payable 2316 Employees federal income tax payable 15440 Cash 27020 (To record payment of payroll liabilities) Dec. 19 Medical insurance payable 31500 Cash 31500 (To record payment of group medical insurance premium) Page 11 Dec. 27 Operations salaries expense 42800 Officers salaries expense 28000 Office salaries expense 7000 Social security tax payable 4668 Medicare tax payable 1167 Employees federal income tax payable 15404 Employees state income tax payable 3501 Bond Deductions payable 1700 Salaries payable 51360 (To record biweekly payroll) Dec. 27 Salaries payable 51360 Cash 51360 (To record payment of biweekly payroll) Dec. 27 Payroll tax expense 6135 Social security tax payable 4668 Medicare tax payable 1167 State unemployment tax payable 225 Federal unemployment tax payable 75 (To record biweekly payroll tax expense) Dec. 27 Employees state income tax payable 20884 Cash 20884 (To record payment of employees' state income tax liability) Dec. 31 Bond Deductions payable 3400 Cash 3400 (To record payment for purchase of bonds) Dec. 31 Pension expense 60000 Cash 45000 Accrued pension liability 15000 (To record pension expense) Page 12 Dec. 31 Operations salaries expense 8560 Officers salaries expense 5600 Office salaries expense 1400 Salaries payable 15560 (To record accrued salaries) Dec. 31 Vacation pay expense 15000 Vacation payable 15000 (To record accrued vacation pay)Related Questions
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