TEAM ASSIGNMENT WEEK 4

TEAM ASSIGNMENT WEEK 4 - P11-1A On January 1, 2008, the...

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Unformatted text preview: P11-1A On January 1, 2008, the ledger of Mane Company contains the following liability accounts. Accounts Payable $52,000 Sales Taxes Payable 7,700 Unearned Service Revenue 16,000 During January the following selected transactions occurred. Jan. 5 Sold merchandise for cash totaling $22,680, which includes 8% sales taxes. 12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2007 ($7,700). 20 Sold 800 units of a new product on credit at $50 per unit, plus 8% sales tax. 21 Borrowed $18,000 from UCLA Bank on a 3-month, 8%, $18,000 note. 25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes. Instructions (a) Journalize the January transactions. (b) Journalize the adjusting entries at January 31 for the outstanding notes payable. ( Hint: Use one-third of a month for the UCLA Bank note.) (c) Prepare the current liabilities section of the balance sheet at January 31, 2008. Assume no change in accounts payable. Solution (a) Jan. 5 Cash 24,494.40 Sales 22,680 Sales Tax Payable 1,814.40 12 Unearned Service Revenue 10,000 Service Revenue 10,000 14 Taxes Payable 7,700 Cash 7,700 20 Accounts Receivable 40,000 Sales 43,200 Sales Tax Payable 3,200 21 Cash 18,000 Notes Payable 18,000 25 Cash 11,500 Sales 12,420 Sales Tax Payable 920 (b)...
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TEAM ASSIGNMENT WEEK 4 - P11-1A On January 1, 2008, the...

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