Textbook Problem

Recording Various Liabilities

Glenview Hardware had the following transactions that produced liabilities during 2020:

a. Purchased merchandise on credit for $30,000. ( Note: Assume a periodic inventory system.)

b. Year-end wages of $10,000 were incurred, but not paid. Related federal income taxes of $1,200, Social Security of $620 (employee portion), and Medicare taxes of $145 were with-held from employees.

c. Year-end estimated income taxes payable, but unpaid, for the year were $42,850.

d. Sold merchandise on account for $1,262, including state sales taxes of S48. ( Note: Assume a periodic inventory system.)

e. Employer’s share of Social Security and Medicare taxes for the period were $620 and $145, respectively.

f. Borrowed cash under a 90-day, 9%, $25,000 note.

Required:

Prepare the entry to record each of these transactions (treat each transaction independently).