As a manager of this company, you have to process the following current liability transactions:

Purchase of merchandise for a total amount of $8,000. Form of payment: $400 in cash per box; $3,600 cash by bank check; For $3,000, a bill of exchange due within three months is accepted, and the remaining $1,000 is left due with no further formality than making its payment within six months.

After the established three months have elapsed, the company pays the amount of the commercial bill through the bank account and accepts another commercial bill for the outstanding debt.

After six months, the company makes the payment of the previous bill through a sight savings account.

The expenses for foreign services accrued in the year were:

Rent of a commercial premises $400

 

• Repair of building facilities $250
• sales transportation $400
• Property fire insurance premium $380
• Advertisements in various advertising media $900
• Electricity receipts $270

 

2. payroll expenses

During the month considered, the company has delivered $1,000 in cash to the workers, on account of their remunerations.

The data corresponding to the monthly payroll are as follows:

 

• gross amount $11,000
• Withholdings for workers on account of their personal income tax  $1,600
• Deductions for Social Security contributions paid by workers  $800
• Social Security contributions paid by the company $3,000

 

The net amount of the payroll, once the advance has been cleared, is paid by bank to the workers, with the exception of $300 that remains pending payment.

The debts with the Public Treasury, with the Social Security and with the workers registered in the previous section are paid by bank.

It is requested to post the previous operations in the Journal book.

Answer rating: 100% (QA)

Journal Entries Purchase of Merchandise Debit Merchandise Inventory 8000 Credit Cash per box 400 Cre... View the full answer