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Recording Various Liabilities
Plymouth Electronics had the following transactions that produced liabilities during 2020:
a. Purchased merchandise on credit for $80,000. ( Note: Assume a periodic inventory system.) Year-end wages of $40,000 were incurred, but not paid. Related federal income taxes of $13,000 and Medicare taxes of $580 were withheld. Employee wages are all above the Social Security maximum, so only Medicare was paid.
b. Year-end estimated income taxes payable, but unpaid, for the year were $113,615.
c. Sold merchandise on account for $3,636, including state sales taxes of $180. ( Note: Assume a periodic inventory system.)
d. Employer’s share of Medicare taxes for the period was $580. The taxes will be paid at a later date.
e. Borrowed cash under a 180-day, 8%, $155,000 note.
Required:
Prepare the entry to record each of these transactions (treat each transaction independently).
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Cornerstones of Financial Accounting
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- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIndividual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT