CH14-D.docx - Comprehensive Problem cont Requirement 1 cont...

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Comprehensive Problem, cont. Requirement 1, cont. DECEMBER Payroll Earnings Withholdings Employee Beginning Cumulative Earnings Current Period Earnings Ending Cumulative Earnings OASDI Medicare Income Tax Health Insurance Total Withholdings Net Pay Jones $ 12,000.00 $ 6,000.00 $ 18,000.00 $ 372.00 $ 87.00 $ 1,800.00 $ 300.00 $ 2,559.00 $ 3,441.00 Smith 10,000.00 5,000.00 15,000.00 310.00 72.50 1,000.00 300.00 1,682.50 3,317.50 Martin 6,000.00 3,000.00 9,000.00 186.00 43.50 450.00 300.00 979.50 2,020.50 $ 28,000.00 $ 14,000.00 $ 42,000.00 $ 868.00 $ 203.00 $ 3,250.00 $ 900.00 $ 5,221.00 $ 8,779.00 DECEMBER Employer Payroll Taxes Tax Earnings Rate Amount OASDI $ 14,000.00 6.20% $ 868.00 Medicare 14,000.00 1.45% 203.00 SUTA* 1,000.00 5.40% 54.00 FUTA* 1,000.00 0.60% 6.00 $ 1,131.00
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*Employee Total Taxable Earnings Beginning Cummulative Earnings Taxable Earnings this Period Jones $ 7,000.00 $ 12,000.00 $ 0.00 Smith 7,000.00 10,000.00 0.00 Martin 7,000.00 6,000.00 1,000.00 $ 1,000.00 Comprehensive Problem, cont. Requirement 2 Date Accounts Debit Credit Oct. 1 Cash (25,000 shares × $10 per share) 250,000 Common Stock—$1 Par Value (25,000 × $1 per share) 25,000 Paid-in Capital in Excess of Par—Common ($250,000 ‒ $25,000) 225,000 1 Land 40,000 Building 160,000 Mortgages Payable 200,000 1 Store Fixtures 10,000 Notes Payable 10,000
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3 Merchandise Inventory 125,000 Accounts Payable 125,000 15 Utilities Expense 160 Cash 160 31 Cash 196,100 Sales Tax Payable ($185,000 × 0.06) 11,100 Sales Revenue 185,000 Cost of Goods Sold 110,000 Merchandise Inventory 110,000 Warranty Expense ($185,000 × 0.08) 14,800 Estimated Warranty Payable 14,800 31 Salaries Expense 14,000 FICA—OASDI Taxes Payable 868 FICA—Medicare Taxes Payable 203 Employee Income Taxes Payable 3,250 Employee Health Insurance Payable 900 Cash 8,779 Comprehensive Problem, cont. Requirement 2, cont.
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Date Accounts Debit Credit Oct. 31 Payroll Tax Expense 1,911 FICA—OASDI Taxes Payable 868 FICA—Medicare Taxes Payable 203 State Unemployment Taxes Payable 756 Federal Unemployment Taxes Payable 84 Nov. 1 Interest Expense 1,333 Mortgages Payable 1,092 Cash 2,425 3 Accounts Payable 125,000 Cash 125,000 10 Merchandise Inventory 150,000 Accounts Payable 150,000 12 Treasury Stock—Common (500 shares × $15 per share) 7,500 Cash 7,500 15 FICA—OASDI Taxes Payable ($868 + $868) 1,736 FICA—Medicare Taxes Payable ($203 + $203) 406 Employee Income Taxes Payable3,250 Employee Health Insurance Payable 900 State Unemployment Taxes Payable 756 Federal Unemployment Taxes Payable 84 Cash 7,132
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15 Sales Tax Payable 11,100 Cash 11,100 16 Estimated Warranty Payable 6,000 Cash 6,000 17 Cash Dividends ((25,000 shares ‒ 500 shares) × $1 per share)) 24,500 Dividends Payable—Common 24,500 Comprehensive Problem, cont. Requirement 2, cont. Date Accounts Debit Credit Nov. 18 Utilities Expense 245 Cash 245 27 Dividends Payable—Common 24,500 Cash 24,500 30 Cash 148,400 Sales Tax Payable ($140,000 × 0.06) 8,400 Sales Revenue 140,000 Cost of Goods Sold 84,000 Merchandise Inventory 84,000 Warranty Expense ($140,000 × 0.08) 11,200
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Estimated Warranty Payable 11,200 30 Salaries Expense 14,000 FICA—OASDI Taxes Payable 868 FICA—Medicare Taxes Payable 203 Employee Income Taxes Payable 3,250 Employee Health Insurance Payable 900 Cash 8,779 30 Payroll Tax Expense 1,431 FICA—OASDI Taxes Payable 868 FICA—Medicare Taxes Payable 203 State Unemployment Taxes Payable 324 Federal Unemployment Taxes Payable 36 Dec. 1
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