a During the year 2019 Sampson Company had net credit sales

a. During the year 2019, Sampson Company had net credit sales of $1,950,000. Past experience shows that 1.5 percent of the firm\'s net credit sales result in uncollectible accounts b. Equipment purchased by Park Consultancy for $38,220 on January 2, 2019, has an estimated useful life of 10 years and an estimated salvage value of $2,700. What adjustment for depreciation should be recorded on the firm\'s worksheet for the year ended December 31, 2019? c. On December 31, 2019, Giant Plumbing Supply owed wages of $11,400 to its factory employees, who are paid weekly. d. On December 31, 2019, Giant Plumbing Supply owed the employer\'s social security (6.2 percent) and Medicare (1.45 percent) taxes on the entire $11,400 of accrued wages for its factory employees e. On December 31, 2019, Giant Plumbing Supply owed federal (0.6 percent) and state (5.4 percent) unemployment taxes on the entire $11,400 of accrued wages for its factory employees. For each of the above independent situations, prepare the adjusting entries that must be made on the December 31, 2019, worksheet. (Round your answers to 2 decimal places.)

Solution

Uncollectible Accounts Expense 29250 =1950000*1.5%       Allowance for Doubtful Accounts 29250 Depreciation Expense--Equipment 3552 =(38220-2700)/10       Accumulated Depreciation--Equipment 3552 Salaries and wages expense 11400        Salaries and wages payable 11400 Payroll tax expense 872.1         Social Security tax payable 706.8 =11400*6.2%         Medicare tax payable 165.3 =11400*1.45% Payroll tax expense 684        Federal unemployment taxes payable 68.4 =11400*0.6%        State unemployment taxes payable 615.6 =11400*5.4%