Chapter-8

Chapter-8 - -When it is time to pay the government the tax...

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1 ACCT 2001 Chapter 8 Notes Payable Account Example : La Maison Complete has borrowed $20,000 for inventory and the note payable is due in 4 months, with a starting date of October 1 st (10-1), and is due on February 2 nd (2-2). The interest rate is 9%. (20,000) (9%) (4/12) = $600 in Interest 600/4 = $150 per month -Adjusting Entry to satisfy the Matching Principle -February 1 st comes and we must pay. 2-1 Notes Payable 20,00 0 Interest Payable 450 Interest Expense 150 Cash 20,600 Sales Tax -If a company had $10,000 in sales, they actually collected an extra $900 in sales tax. 5% for East Baton Rouge and 10% for the State of Louisiana.
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Unformatted text preview: -When it is time to pay the government the tax Sales Tax Payable 90 Cash 900 10-1 Inventory 20,00 Notes Payable 20,000 12-31 Interest Expense 45 Interest Payable 450 Cash 10,90 Sales Revenue 10,000 Sales Tax Payable 900 2 Income Tax-Say that your first paycheck is $10,000. After income tax, you only take home $8,035. Salary Expense 10,00 FICA Payable 765 Income Tax Payable 1,200 Cash 8,035-Whenever the company has to pay the government, this is the entry: FICA Payable 765 Income Tax Payable 1,20 Cash 1,965...
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Chapter-8 - -When it is time to pay the government the tax...

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