Indiana Jones Company had the following selected transactions.
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Feb. 1 |
Signs a $50,000, 6 month, 9% interest bearing note payable to CitiBank and receives $50,000 in cash. |
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10 |
Cash register sales total $43,200, which includes an 8% sales tax. |
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28 |
The payroll for the month consists of Sales Salaries $32,000 and Office Salaries $18,000. All wages are subject to 8% FICA taxes. A total of $8,900 federal income taxes are withheld. The salaries are paid on March 1. |
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28 |
The company develops the following adjustment data. |
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1. Interest expense of $375 has been incurred on the note. |
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2. Employer payroll taxes include 8% FICA taxes, a 5.4% state unemployment tax, and a 0.8% federal unemployment tax. |
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3. Some sales were made under warranty. Of the units sold underwarranty, 350 are expected to become defective. Repair costs are estimated to be $40 per unit. |