Accounting Journal Entry
Accounting Journal Entry
Brief Exercise 13-5
Sport Pro Magazine sold 13,320 annual subscriptions on August 1, 2014, for $24 each. Prepare Sport Pro’s August 1, 2014, journal entry and the December 31, 2014, annual adjusting entry, assuming the magazines are published and delivered monthly.
| Date | Account Title and Explanation | Debit | Credit |
| 8/1/14 | Cash
Unearned revenue ($13,320×$24=$319,680) |
$319,680
|
$319,680
|
| 12/31/14 | Unearned revenue
Subscription revenue ($319,680×5/12=$133,200) |
$133,200 |
$133,200
|
Exercise 13-8
The payroll of YellowCard Company for September 2013 is as follows.
Total payroll was $460,500, of which $145,400 is exempt from Social Security tax because it represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $390,200. Income taxes in the amount of $86,740 were withheld, as was $8,120 in union dues. The state unemployment tax is 3.5%, but Yellow Card Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $106,800 and 1.45% in excess of $106,800. No employee for Yellow Card makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.
Prepare the necessary journal entries if (a) the wages and salaries paid and (b) the employer payroll taxes are recorded separately.
| Account Title and Explanation | Debit | Credit |
| Salaries and Wages
Federal Income Tax Payable FICA Tax Payable ($315,100×7.65% + $145,400 ×1.45%) Union Due Payable Cash |
$460,500
|
$86,740 $26,213 $8,120 $339,427 |
| Account Title and Explanation | Debit | Credit |
| Payroll Tax Expense
FICA Tax Payable Federal Unemployment Tax Payable (70,300×0.8%) State Unemployment Tax Payable (70,300×1.2%) |
$27,619 |
$26,213 $562 $844 |
Problem 13-1
Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system.
| 1. | On February 2, the corporation purchased goods from Martin Company for $78,400 subject to cash discount terms of 3/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. | |
| 2. | On April 1, the corporation bought a truck for $67,000 from General Motors Company, paying $3,000 in cash and signing a one-year, 10% note for the balance of the purchase price. | |
| 3. | On May 1, the corporation borrowed $130,800 from Chicago National Bank by signing a $140,760 zero-interest-bearing note due one year from May 1. | |
| 4. | On August 1, the board of directors declared a $311,000 cash dividend that was payable on September 10 to stockholders of record on August 31. |
Make all the journal entries necessary to record the transactions above using appropriate dates.
| Date | Account Title and Explanation | Debit | Credit |
| February 2 | Purchases ($78,400×97%)
Accounts Payable |
$76,048 |
$76,048 |
| Date | Account Title and Explanation | Debit | Credit |
| February 26 | Accounts Payable
Purchase Discount lost Cash |
$76,048
$2,352 |
$78,400 |
| Date | Account Title and Explanation | Debit | Credit |
| April 1 | Truck
Cash Notes Payable |
$67,000 |
$3,000 $64,000 |
| Date | Account Title and Explanation | Debit | Credit |
| May 1 | Cash
Discount on Notes Payable Notes Payable |
$130,800
$9,960 |
$140,760 |
| Date | Account Title and Explanation | Debit | Credit |
| August 1 | Retained Earnings
Dividends Payable |
$311,000 |
$311,000 |
| Date | Account Title and Explanation | Debit | Credit |
| September 10 | Dividends Payable
Cash |
$311,000 |
$311,000 |
Do you need an Original High Quality Academic Custom Essay?
