2. January 1, John Smith formed a corporation. Record the following transactions that took place during the yearended December 31, 1990 on the attached sheet. The corporation records transactions on an accrual basis.Record contribution of $25,000 cash for Capital Stock.Leased a building at a cost of $10,000 per year on 1/1/90.Purchased inventory for resale at a cost of $20,000 payable June 15, 1991.Sold one-fourth of the inventory for $5,000 cash and $5,000 on account.Collected $2,500 on account.Paid salaries as follows: Gross Pay$954158Federal withholdingFICA withholdingNet Pay46$750Paid taxes withheld and company's share of FIICA ($46) to the government.Transaction for the YearCreditsDebitsCashAccounts ReceivableInventoryAccounts PayableAccrued Payroll TaxesCapital StockRetained Earning (Net Income)SalesCost of SalesSalariesPayroll TaxesLease ExpenseIncome TaxesTotal Transactions

Given: Gross pay =$954 Federal withholding =158 FICA withholding=46 Net pay=$750

Answered: ribution of ilding at a nventory f urth…

Business

Accounting

ribution of ilding at a nventory f urth of the

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 24CE

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