Indiana Jones Company had the following selected transactions.
Feb. 1 Signs a $50000 6-month 9%-interest-bearing note payable to CitiBank and receives $50000 in cash.
10 Cash register sales total $43200 which includes an 8% sales tax.
28 The payroll for the month consists of salaries and wages of $50000. All wages are subject to 8% FICA taxes. A total of $8900 federal income taxes are
withheld. The salaries are paid on March 1.
28 The company develops the following adjustment data.
1. Interest expense of $375 has been incurred on the note. 2. Employer payroll taxes include 8% FICA taxes a 5.4% state unemployment tax and a 0.8%
federal unemployment tax.
3. Some sales were made under warranty. Of the units sold under warranty 350 are expected to become defective. Repair costs are estimated to be $40 per
(a) Journalize the February transactions.
(b) Journalize the adjusting entries at February 28.
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