Cash Accounts Payable

$$\mathrm{}$$38,400$

$$$$17,600$

Inventory$\mathrm{}$

$39,360$

$$Interest Payable$\mathrm{}$

$320$

Prepaid Insurance

$7\mathrm{.}680$

$$Notes Payable$\mathrm{}$

$64\mathrm{.}000$

$$Equipment$\mathrm{}$

$48,640$

Owner's Capital$\mathrm{}$

$52,160$

$$134,080$

$$134,080$

$$During January $2022,$ ?the following transactions occurred. $($Waterway Company uses the perpetual inventory system.$)$

$$$1.$ ?Waterway paid $$320$ ?interest on the note payable on January $1,2022.$ ?The note is due December $31,2023.$$\mathrm{}$

$2.$ ?Waterway purchased $$334,208$ ?of inventory on account.$\mathrm{}$

$3.$ ?Waterway sold for $$563,200$ ?cash, inventory which cost $$339,200.$ ?Waterway also collected $$36,608$ ?in sales taxes.$\mathrm{}$

$4.$ ?Waterway paid $$294,400$ ?in accounts payable.

$5.$ ?Waterway paid $$21,760$ ?in sales taxes to the state.$\mathrm{}$

$6.$ ?Paid other operating expenses of $$38,400.$$\mathrm{}$

$7.$ ?On January $31,2022,$ ?the payroll for the month consists of salaries and wages of $$96,000.$ ?All salaries and wages are subject to $7\mathrm{.}65\%$ ?FICA taxes. A total of $$11,440$ ?federal income taxes are withheld. The salaries and wages are paid on February $1.$Adjustment data:$\mathrm{}$

$8.$ ?Interest expense of $$320$ ?has been incurred in January on the notes payable.$\mathrm{}$

$9.$ ?The insurance for the year $2022$ ?was prepaid on December $31,2021.$$\mathrm{}$

$10.$ ?The equipment was acquired on December $31,2021,$ ?and will be depreciated on a straight$-$line basis over $5$ ?years with a $$2,560$ ?salvage value$\mathrm{.}\mathrm{}$

$11.$ ?Employer's payroll taxes include $7\mathrm{.}65\%$ ?FICA taxes, a $5\mathrm{.}4\%$ ?state unemployment tax, and an $0\mathrm{.}6\%$ ?federal unemployment tax.$($a$)$Prepare journal entries for the transactions listed above and the adjusting entries. $($Credit account titles are automatically indented when amount is enterPrepare an income statement for the month ending January $31,2022.($Round answers to O decimal places, e$.$g$.5,275.)$

WATERWAY COMPANY Income Statement Prepare an income statement for the month ending January $31,2022.($Round answers to $0$ ?decimal places, e$.$g$.5,275.)$

Transcribed Image Text:

WATERWAY COMPANY Income Statement Prepare an income statement for the month ending January 31, 2022. (Round answers to O decimal places, e.g. 5,275.) +A +A > > 69 $ WATERWAY COMPANY Income Statement Prepare an income statement for the month ending January 31, 2022. (Round answers to O decimal places, e.g. 5,275.) +A +A > > 69 $

Answer rating: 100% (QA)

Here are the journal entries for the transactions listed 1 Waterway paid 320 interest on the note payable on January 1 2022 Debit Interest Expense 320 ... View the full answer