For the year ended December 31, 2022, Denkinger Electrical Repair Company reports the following summary payroll data.
Gross earnings:
Administrative salaries ………………$200,000
Electricians’ wages ………………………370,000
Total ………………………………………….$570,000
Deductions:
FICA taxes ………………………………….$ 38,645
Federal income taxes withheld …..174,400
State income taxes withheld (3%)….17,100
United Fund contributions payable .27,500
Health insurance premiums …………17,200
Total …………………………………………$274,845
Denkinger Company’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.6% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $490,000, and gross earnings subject to unemployment taxes total $135,000. No employee exceeds the $127,200 limit related to FICA taxes.

Instructions
a. Prepare a summary journal entry at December 31 for the full year’s payroll.
b. Journalize the adjusting entry at December 31 to record the employer’s payroll taxes.
c. The W-2 Wage and Tax Statement requires the following dollar data.

Mann Hardware has four employees who are paid on an hourly basis plus time-and a-half for all hours worked in excess of 40 a week. Payroll data for the week ended March 15, 2022, are presented as follows.

Abel and Hager are married. They claim 0 and 4 withholding allowances, respectively. The following tax rates are applicable: FICA 7.65%, state income taxes 3%, state unemployment taxes 5.4%, and federal unemployment 0.6%.

Instructions
a. Prepare a payroll register for the weekly payroll. (Use the wage-bracket withholding table in the text for federal income tax withholdings.)
b. Journalize the payroll on March 15, 2022, and the accrual of employer payroll taxes.
c. Journalize the payment of the payroll on March 16, 2022.
d. Journalize the deposit in a Federal Reserve bank on March 31, 2022, of the FICA and federal income taxes payable to the government.

The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2022.
FICA Taxes Payable …………………………………$ 760.00
Federal Income Taxes Payable ………………..1,204.60
State Income Taxes Payable ………………………108.95
Federal Unemployment Taxes Payable ……..288.95
State Unemployment Taxes Payable ……..1,954.40
Union Dues Payable …………………………………870.00
U.S. Savings Bonds Payable ……………………..360.00

In January, the following transactions occurred.
Jan. 10 Sent check for $870.00 to union treasurer for union dues.
12 Remitted check for $1,964.60 to the Federal Reserve bank for FICA taxes and federal income taxes withheld.
15 Purchased U.S. Savings Bonds for employees by writing check for $360.00.
17 Paid state income taxes withheld from employees.
20 Paid federal and state unemployment taxes.
31 Completed monthly payroll register, which shows salaries and wages $58,000, FICA taxes withheld $4,437, federal income taxes payable $2,158, state income taxes payable $454, union dues payable $400, United Fund contributions payable $1,888, and net pay $48,663.
31 Prepared payroll checks for the net pay and distributed checks to employees.
At January 31, the company also makes the following accrued adjustments pertaining to employee compensation.

1. Employer payroll taxes: FICA taxes 7.65%, federal unemployment taxes 0.6%, and state unemployment taxes 5.4%.
2. Vacation pay: 6% of gross earnings. (Use Vacation Benefit Expense to record the transaction.)

Instructions
a. Journalize the January transactions.
b. Journalize the adjustments pertaining to employee compensation at January 31.

Selected account balances for Ramano Company at January 1, 2022, are presented below.

Accounts Payable	$19,000
Accounts Receivable	22,000
Cash	17,000
Inventory	13,500

Ramano’s sales journal for January shows a total of $100,000 in the selling-price column, and its one-column purchases journal for January shows a total of $72,000. 

The column totals in Ramano’s cash receipts journal are Cash Dr. $64,000; Sales Discounts Dr. $1,100; Cr. $48,000; Sales Revenue Cr. $6,000; and Other Accounts Cr. $11,100.

The column totals in Ramano’s cash payments journal for January are Cash Cr. $55,000; Inventory Cr. $1,000; Dr. $46,000; and Other Accounts Dr. $10,000. Ramano’s total cost of goods sold for January is $63,600.

Accounts Payable, Cash, Inventory, and Sales Revenue are not involved in the “Other Accounts” column in either the cash receipts or cash payments journal, and are not involved in any general journal entries.

Instructions

Compute the January 31 balance for Ramano in the following accounts.

a. Accounts Payable.

b. Accounts Receivable.

c. Cash.

d. Inventory.

e. Sales Revenue.

Milner Co. uses special journals and a general journal. The following transactions occurred during May 2022.
May 1 M. Milner invested $48,000 cash in the business in exchange for common stock.
2 Sold merchandise to A. Belton for $6,340 cash. The cost of the merchandise sold was $4,200.
3 Purchased merchandise for $7,200 from E. Stein using check no. 101.
14 Paid salary to M. Hunt $700 by issuing check no. 102.
16 Sold merchandise on account to S. Spies for $900, terms n/30. The cost of the merchandise sold was $630.
22 A check of $9,000 is received from N. Feeney in full for invoice 101; no discount given.

Instructions
a. Prepare a multi-column cash receipts journal (see Illustration J.8) and a multi column cash payments journal (see Illustration J.15). (Use page 1 for each journal.)
b. Record the transaction(s) for May that should be journalized in the cash receipts journal and cash payments journal.

Norren Company uses special journals and a general journal. The following transactions occurred during September 2022.

Sept. 2 Sold merchandise on account to J. Yancey, invoice no. 101, $780, terms n/30. The cost of the merchandise sold was $420.
10 Purchased merchandise on account from H. Heerey $600, terms 2/10, n/30.
12 Purchased office equipment on account from Y. Kojima $6,500.
21 Sold merchandise on account to K. Pricer, invoice no. 102 for $800, terms 2/10, n/30.
The cost of the merchandise sold was $480.
25 Purchased merchandise on account from G. Jeanik $835, terms n/30.
27 Sold merchandise to D. Schaff for $700 cash. The cost of the merchandise sold was $400.

Instructions

a. Prepare a sales journal (see Illustration J.6) and a single-column purchases journal (see Illustration J.12). (Use page 1 for each journal.)

b. Record the transaction(s) for September that should be journalized in the sales journal and the purchases journal.

AP At the end of its first year of operations on December 31, 2022, NBS Company’s accounts show the following.

The capital balance represents each partner’s initial capital investment. Therefore, net income or net loss for 2022 has not been closed to the partners’ capital accounts.

Instructions
a. Journalize the entry to record the division of net income for the year 2022 under each of the following independent assumptions.
1. Net income is $30,000. Income is shared 6:3:1.
2. Net income is $40,000. Niensted and Bolen are given salary allowances of $15,000 and $10,000, respectively. The remainder is shared equally.
3. Net income is $19,000. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $15,000 salary allowance. The remainder is shared equally
b. Prepare a schedule showing the division of net income under assumption (3) above.
c. Prepare a partners’ capital statement for the year under assumption (3) above.

Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2022, the earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made drawings of $24,000.

Instructions
a. Assume the income-sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income.
b. Assume the income-sharing agreement calls for income to be divided with a salary of $30,000 to Coburn and $25,000 to Webb, with the remainder divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income.
c. Assume the income-sharing agreement calls for income to be divided with a salary of $40,000 to Coburn and $35,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%–50%. Prepare the journal entry to record the allocation of net income.
d. Compute the partners’ ending capital balances under the assumption in part (c).

On May 1, Steven Rumford started Skyline Flying School, a company that provides flying lessons, by investing $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2022, and the revenues and expenses for the month of May Steven Rumford made no additional investment in May, but he withdrew $1,700 in cash for personal use.

Instructions
a. Prepare an income statement and owner’s equity statement for the month of May and a at May 31.
b. Prepare an income statement and owner’s equity statement for May assuming that the data above need to be adjusted for the following items: (1) $900 worth of services were performed and billed but not collected at May 31, and (2) $3,300 of gasoline expense was incurred but not paid.