KIMMEL_Acct_2e_ProblemCSolutions_ch10

Accounting: Tools for Business Decision Making

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Unformatted text preview: SOLUTIONS TO PROBLEMS PROBLEM 10-1C (a) Jan. 1 Cash............................................................ 16,000 Notes Payable..................................... 16,000 7 Cash............................................................ 19,610 Sales ($19,610 1.06)........................ 18,500 Sales Taxes Payable.......................... 1,110 ($19,610 $18,500) 10 Unearned Service Revenue...................... 8,000 Service Revenue................................ 8,000 15 Sales Taxes Payable.................................. 5,300 Cash..................................................... 5,300 26 Accounts Receivable................................. 29,680 Sales.................................................... 28,000 Sales Taxes Payable.......................... 1,680 (700 X $40 X 6%) (b) Jan. 31 Interest Expense........................................ 120 Interest Payable.................................. 120 ($16,000 X 9% X 1/12) 31 Salaries and Wages Expense................... 56,000 FICA Taxes Payable........................... 4,284 Federal Income Taxes Payable......... 6,000 State Income Taxes Payable............. 2,500 Salaries and Wages Payable............. 43,216 31 Payroll Tax Expense.................................. 4,284 FICA Taxes Payable........................... 4,284 10-1 PROBLEM 10-1C (Continued) (c) Current liabilities Notes payable................................................................... $ 16,000 * Accounts payable............................................................ 36,800 * Salaries and wages payable........................................... 43,216 * FICA taxes payable ($4,284 X 2)..................................... 8,568 * Federal income taxes payable........................................ 6,000 * Unearned service revenue ($12,400 $8,000).............. 4,400 * Sales taxes payable......................................................... 2,790* State income taxes payable............................................ 2,500 * Interest payable................................................................ 120 Total current liabilities............................................. $ 120,394 * *($5,300 + $1,110 $5,300 + $1,680) 10-2 PROBLEM 10-2C (a) Aug. 1 Merchandise Inventory or Purchases.............................................. 6,000 Notes Payable................................... 6,000 31 Interest Expense....................................... 45 ($6,000 X .09 X 1/12) Interest Payable................................ 45 Sept. 1 Ramp.......................................................... 15,000 Notes Payable................................... 15,000 30 Interest Expense....................................... 145 [($15,000 X .08 X 1/12) + $45] Interest Payable................................ 145 Oct. 1 Building..................................................... 40,000 Notes Payable................................... 30,000 Cash...................................................Cash....
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KIMMEL_Acct_2e_ProblemCSolutions_ch10 - SOLUTIONS TO...

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