Question

Recording Various Liabilities Glenview Hardware had the following transactions that produced liabilities during 2020: Purchased merchandise on credit for $30,000. (Note: Assume a periodic inventory system.) Year-end wages of $10,000 were incurred, but not paid. Related federal income taxes of $1,200, Social Security of $620 (employee portion), and Medicare taxes of $145 were withheld from employees. Year-end estimated income taxes payable, but unpaid, for the year were $42,850. Sold merchandise on account for $1,262, including state sales taxes of $48. (Note: Assume a periodic inventory system.) Employer's share of Social Security and Medicare taxes for the period were $620 and $145, respectively. Borrowed cash under a 90-day, 9%, $25,000 note. Required: Prepare the entry to record each of these transactions (treat each transaction independently). If an amount box does not require an entry, leave it blank. a. (Record purchase of inventory on account) b. (Record wages and liabilities) c. (Record accrued income taxes) d. (Record sale) e. (Record employer payroll taxes) f. (Record issuance of note)

Answer 1

Step-by-step explanation:

Glenview Hardware

A. (Record purchase of inventory on account)

Debit Inventory with $30,000

Credit Account Payable Account with $30,000

B. (Record wages and liabilities)

Debit Wages Expense with $8,035

Debit income tax expense (employee) with $1,200

Debit Medicare Taxes Expense (Employee) with $145

Debit social security (Employee) with $620

Credit Wages Payable with $10,000

C. (Record accrued income taxes)

Debit income tax Account with $42,850

Credit Income tax Payable with $42,850

D. (Record sale)

Debit Account Receivable

Credit Sales with $1,219

Credit Sales Tax Payable with $1,219

E. (Record employer payroll taxes)

Debit Social security (employer) with $620

Debit Medicare taxes with $145

Credit Social Security Payable with $620

Credit Medicare taxes Payable with $145

F. (Record issuance of note)

Debit bank with $90,000

Debit Finance Interest with $8,100

Credit 9% 90days note issued with $98,100