Lakeview Company completed the following two transactions. The annual accounting period ends December 31. a. On December

Question:

Lakeview 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 ($80,000), payroll deductions for income tax ($8,000), payroll deductions for CPP ($5,000) and EI ($1,000), payroll deductions for Canadian Cancer Society ($3,000), and employer contributions for CPP (matching) and EI ($1,400). Employees were paid in cash, but payments for the corresponding payroll deductions have not yet been made and employer taxes have not yet been recorded.

b. Collected rent revenue of $6,000 on December 10 for office space that Lakeview rented to another business. The rent collected was for thirty days from December 11 to January 10 and was credited in full to Deferred Revenue.

Required:

1. Give the journal entries to record payroll on December 31.

2. Give (a) the journal entry for the collection of rent on December 10 and (b) the adjusting journal entry on December 31.

3. Show how any liabilities related to these items should be reported on the company’s balance sheet at December 31.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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