Part I: Record, in general journal entry form, the following: 1. November 1, pur
ID: 2382507 • Letter: P
Question
Part I: Record, in general journal entry form, the following:
1. November 1, purchased a fork lift truck for $40,000 by issuing a 3 month, 10% note.
2. December 1, received $8,000 from a customer to provide services evenly over the next
five months.
3. December 31, made necessary year-end adjusting entries related to the transactions
created in 1 and 2..
4. January 31, paid off the note and related interest.
5. February 28, the payroll register contained the following totals:
gross wages $92,750; federal income taxes withheld, $23,721; state income taxes
withheld, $3,909; social security tax withheld, $5,751; Medicare tax withheld,
$1,345.
Prepare entries to record the (a) monthly payroll and (b) the employer payroll expenses,
assuming social security and Medicare taxes equal to the amount for employees, and a
federal unemployment insurance tax of .8 percent, a state unemployment tax of 5.4
percent. Wages subject to unemployment were $57,240.
5a.
5b.
INSTRUCTIONS:
A. Prepare journal entries for each transaction (list identifying number, then the accounts
and amounts debited and credited- in good form). If no entry is required for an
item, explain why.
B. Assuming that the company had a current ratio of 1.8, how would transaction
1 and 2 above affect the amount of working capital and the current ratio (do each
Transaction analysis independent of the other)? Will the working capital and
current ratio increase, decrease, or not be affected.
Explanation / Answer
super hard not sure