On January 1, 2017, the ledger of Accardo Company contains the following liabili
ID: 2468286 • Letter: O
Question
On January 1, 2017, the ledger of Accardo Company contains the following liability accounts. Accounta Payable $53,500 Sales Taxes Payable 7,700 Unearned Service Revenue 16,000 During January, the following selected transactions occurred. Jan. 5 Sold merchandise for cash totaling $20,088, which includes 8% sales taxes. 12 Performed services for customers who had made advance payments of $10,500. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2016 ($7,700). Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty. Borrowed $24,750 from Girard Bank on a 3-month, 8%, $24,750 note. Sold merchandise for cash totaling $12,636, which includes 8% sales taxes. Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)Explanation / Answer
Jan. 5 Cash 20,088 Sales ($20,088 ÷ 108%) 18,600 Sales Taxes Payable 1,488 ($20,088 – $18600) 12 Unearned Service Revenue 10,500 Service Revenue 10,500 14 Sales Taxes Payable 7,700 Cash 7,700 20 Accounts Receivable 48,600 Sales 45,000 Sales Taxes Payable 3600 (900 X $50 X 8%) 21 Cash 24,750 Notes Payable 24,750 25 Cash 12,636 Sales ($12,636÷ 108%) 11,700 Sales Taxes Payable 936 ($12,636 – $11,700)