Question

Calibri (Body) A A" 11 2 Wrap Text v General Paste Merge & Center v M18 B. D. H. 1 Problem C Ruiz Company sells merchandilse in a state that has a 5 per cent sales tax. On 2010 January 2, Rulz sold goods with a sales price of $ 80,000 on credit. Sales taxes collected are recorded in a separate account. Assume that sales for the entire month were $ 900,000. On 2010 January 31, the company remitted the 2 sales taxes collected to the state taxing agency. -4 Prepare the general journal entries to record the January 2 sales revenue. Also prepare the entry to show the remittance of the taxes on January 31. Now assume that the merchandise sold on January 2 also is subject to federal excise taxes of 12 per cent. The federal excise taxes collected are remitted 5 to the proper agency on January 31. Show the entries on January 2 and January 31. GENERAL POST Account/Description REF. Date Debit Credit 14 4.

Answer 1

Problem C
Date	Account/Description	Ref	Debit	Credit
Entry for sales revenue
02-Jan	Accounts Receivable		84000
	Sales			80000
	Sales Tax Payable (80,000 x 5%)			4000
Entry for sales tax remittencefor total sale of $900,000
31-Jan	Sales Tax Payable		45000
	Cash			45000
Assumption entry for Jan 2 if Federal tax is also there along with sales tax
02-Jan	Accounts Receivable		93600
	Sales			80000
	Sales Tax Payable (80,000 x 5%)			4000
	Federal Excise Tax Payable (80000 x 12%)			9600
Cash collected from the debtor includes both sales and federal tax
31-Jan	Cash		93600
	Accounts Receivable			93600
Paying Sales tax and federal tax to authority
31-Jan	Federal Excise Tax Payable (80000 x 12%)		9600
	Cash			9600
Alternative Problem D
	Number of Bicylces sold	4,000
	Percent estimated to develop defects	x 20%
	Total estimated defective computers	800
	Deduct computers returned as defective to date	– 500
	Estimated additional number to become
	defective during warranty period	300
	Estimated average warranty repair cost per compute:	x $40
	Estimated warranty payable	$12,000
Date	Account/Description	Ref	Debit	Credit
Entry to record estimated product warranty payable
	Product Warranty Expense		12000
31-Dec-09	Estimated Warranty Payable			12000
To record replacement of parts under warranty.
03-Jan-10	Estimated Warranty Payable		40
	Repair Parts Inventory			25
	Wages Payable			15
Paycheck Problem - Jay
Net pay that an JAY would receive:
	Gross Pay	1160
	Social Security	71.92
	Medicare	16.82
	Federal IT Withholding	116
		955.26
Amount of taxes that the employer would need to pay.
	Social Security	71.92
	Medicare	16.82
	Federal Unemployment	9.86
	State Unemployment	62.64
		161.24
Date	Account/Description	Ref	Debit	Credit
record the payment of the paycheck:
	Wage expense		1160
	Social Security Payable			71.92
	Medicare Payable			16.82
	Federal IT Withholding Payable			116
	Cash			955.26
liabilities that will be paid and the company expense.
	Payroll Tax expense		161.24
	Social Security Payable			71.92
	Medicare Payable			16.82
	Federal IT Withholding Payable			9.86
	State Unemployment			62.64
Unite 13
Exercise A	Journal
Date	Account/Description	Ref	Debit	Credit
To record Kellys cash contribution
	Cash		130000
	Kelly Capital			130000
To record assets and mortgage contributed by Rose
	Equipment		20000
	Building		150000
	Mortgage			70000
	Rose Capital			100000
Exercise B
	Journal
Date	Account/Description	Ref	Debit	Credit
To record cash withdrawn by owners
	Z's Withdrawal		25000
	Y's Withdrawal		18000
	Cash			43000