Question

On January 1, 2022, the ledger of Oriole Company contained these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $44,100 8,200 20,600 During January, the following selected transactions occurred. Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, 518,000 note. 5 Sold merchandise for cash totaling $5,936, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $11,700. (Credit Service Revenue.) 14 Paid state treasurer's department for sales taxes collected in December 2021, $8,200. 20 Sold 660 units of a new product on credit at 550 per unit, plus 6% sales tax. During January, the company's employees eamed wages of $98,000. Withholdings related to these wages were $7,497 for Social Security (FICA), $5,229 for federal income tax, and $1,569 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31. Joumalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to nearest whole dollar amount, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense. (Credit accou Debit Credit Date Account Titles and Explanation Jan. 31 (To record the interest on outstanding notes payable.) Jan. 31 (To record payroll and withholding taxes.) Jan. 31 (To record employer's payroll taxes.) SHOW LIST OF ACCOUNTS Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in Accounts Payable. ORIOLE COMPANY Balance Sheet (Partial)

Answer 1

The preparation of the journal entries is as follows:

Journal Entries for January Transactions:

Date                 Account Titles and Explanation     Debit    Credit

Jan. 1, 2022:   Cash                                             $518,000

                        Notes Payable                                           $518,000

• (To record borrowing on notes payable for 4 months at 5%.)

Jan. 5, 2022:  Cash                                                $5,936

                       Sales Taxes Payable                                        $336

                       Sales Revenue                                              $5,600

• (To record the sale of merchandise for cash.)

Jan.. 12, 2022: Unearned Service Revenue       $11,700

                        Service Revenue                                         $11,7004

• (To record the performance of services for customers.)

Jan. 14, 2022: Sales Taxes Payable                   $8,200

                        Cash                                                            $8,200

• (To record the payment of sales taxes collected in December.)

Jan. 20, 2022: Accounts Receivable            $384,780

                          Sales Taxes Payable                              $21,780

                          Sales Revenue                                    $363,000

• (To record the sale of 660 units at $550 per unit, plus 6% sales tax.)

Adjusting Journal Entries:

Date                Account Titles and Explanation     Debit    Credit

Jan. 31, 2022: Interest Expense                           $2,158

                       Interest Payable                                           $2,158

• (To record the interest on outstanding notes payable.)

Jan. 31, 2022: Wages Expense                         $98,000

                       Wages Payable                                        $98,000

• (To record the wages expenses accrued.)

Jan. 31, 2022:  Wages Expense                        $14,295

                         Payroll Taxes Payable                          $14,295

• (To record payroll and withholding taxes.)

Jan. 31, 2022: Payroll Taxes Expense              $7,497

                       Payroll Taxes Payable                            $7,497

• (To record employer's payroll taxes.)

2. The preparation of the current liabilities section of the balance sheet at January 31, 2022, is as follows:

Liability Accounts:

Accounts Payable                 $44,100

Sales Taxes Payable               22,116

Unearned Service Revenue   8,900

Notes Payable                     518,000

Wages Payable                    98,000

Payroll Taxes Payable          21,792

Interest Payable                     2,158

Total current liabilities   $715,066

Transactions Analysis:

Liability Accounts:

Accounts Payable $44,100

Sales Taxes Payable 8,200

Unearned Service Revenue  20,600

Jan. 1, 2022: Cash $518,000 Notes Payable $518,000 4-month, 5%

Jan. 5, 2022: Cash $5,936 Sales Taxes Payable $336 Sales Revenue $5,600

Jan.. 12, 2022: Unearned Service Revenue $11,700 Service Revenue $11,700

Jan. 14, 2022: Sales Taxes Payable $8,200 Cash $8,200

Jan. 20, 2022: Accounts Receivable $384,780 Sales Taxes Payable $21,780 Sales Revenue $363,000

Jan. 31, 2022: Wages Expense $98,000 Wages Payable $98,000

Jan. 31, 2022:  Wages Expense $14,295 Payroll Taxes Payable $14,295

Jan. 31, 2022: Payroll Taxes Expense $7,497 Payroll Taxes Payable $7,497

Jan. 31, 2022: Interest Expense $2,158 Interest Payable $2,158

Liability Accounts:

Accounts Payable $44,100

Sales Taxes Payable 22,116 (8,200 + 336 -8,200 + 21,780)

Unearned Service Revenue 8,900 (20,600 - 11,700)

Notes Payable $518,000

Wages Payable $98,000

Payroll Taxes Payable $21,792 ($14,295 + 7,497)

Interest Payable $2,158

Learn more about journalizing sales transactions at brainly.com/question/17201601

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