Answer:
a) It will accrue revenue through time. As in November 6th it has the obligation to keep the downhill ski open or return the cash
cash 405 debit
unearned reveue 405 credit
--to record sales of season pass--
unearned revenue 81 debit
service revenue 81 credit
--year-end adjustment for accrued revenue--
Income statetent
service revenue 81
Balance sheet
Liaiblities
unearned revneue 324
Explanation:
We must recognize revneue following the acounting pricniples of conservatisim and matching when the time at they occur.
405 is the cost for 5 months (Dec 1st to April 30th)
so 405 / 5 = 81 cost per month
At decmeber 31th we recognize 1 month
ANd this will be the value included in the income statement
Answer:
Charging Sales tax
Explanation:
Merchandising business is the kind of business, that buys or purchases the finished products and then resells them to the customers.
So, the merchandising business could act as a collection agency for the government through charging the sales tax. There is need to remit the government after collecting the tax and when it is done, the business will decrease the cash and the sales tax liability.
And it is the lability to the government until it is remitted by the business.
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Answer:
The Journal entry is as follows:
Sales salary expense A/c Dr. $35,000
To FICA social security tax $2,170
To FICA medicare tax $507.50
To federal income tax $6,500
To medical insurance deduction $772.50
To union dues $120
To sales salaries payable $24,930
(To record the employee payroll for the period)
Notes:
FICA social security tax = $35,000 × 6.2%
= $2,170
FICA medicare tax = $35,000 × 1.45%
= $507.50
