CP10-3 Recording and Reporting Current Liabilities [LO 10-2] The following infor

Question

CP10-3 Recording and Reporting Current Liabilities [LO 10-2] The following information applies to the questions displayed below Riverside Company completed the following two transactions. The annual accounting period ends December 31. a. On December 31, calculated the payroll, which indicates gross earnings for wages ($155,000), payroll deductions for income tax ($15,500), payroll deductions for FICA ($15,000), payroll deductions for United Way ($3,000), employer contributions for FICA (matching), and state and federal unemployment taxe:s ($1,800), Employees were paid in cash, but these payments and the corresponding payroll deductions and employer taxes have not yet been recorded. b. Collected rent revenue of $4,200 on December 10 for office space that Riverside rented to another business. The rent collected was for 30 days from December 11 to January 10 and was credited in full to Unearned Rent Revenue. References Section Break CP10-3 Recording and Reporting Current

Explanation / Answer

1) Date Accounts Debit Credit 31-Dec Wages Expenses $ 155,000 Withheld incometax payable $     15,500 FICA payable $     15,000 American Society $       3,000 Cash $ 121,500 (Recorded net cash paid to employee and various taxes payable) 31-Dec Payroll tax expense $     16,800 FICA payable $     15,000 Federal & Stated unemployment taxes payable $       1,800 (Recorded payroll expenses) 2) 10-Dec Cash $       4,200 Unearned rent revenue $       4,200 (Recorded unearned rent revenue) 31-Dec Unearned rent revenue $       2,800 Rent revenue $       2,800 (Adjusted the rent revenue) 3) RIVERSIDE Company Balance Sheet Partial As at 31 December Liabiliites Amount Accrued Payroll (155000-121500) $     33,500 Accrued taxes $     16,800 Accrued rent revenue $       2,800 Total Accrued Liabiliites $     53,100

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