Question: On January 1 2014 the ledger of Shumway Company contains

On January 1, 2014, the ledger of Shumway Company contains the following liability accounts.
Accounts Payable ........... $52,000
Sales Taxes Payable ........... 5,800
Unearned Service Revenue ........ 14,000
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $22,470, which includes 7% 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 2013 ($5,800).
20 Sold 600 units of a new product on credit at $50 per unit, plus 7% sales tax.
21 Borrowed $14,000 from DeKalb Bank on a 3-month, 8%, $14,000 note.
25 Sold merchandise for cash totaling $12,947, which includes 7% sales taxes.

Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entries at January 31 for the outstanding notes payable.
(c) Prepare the current liabilities section of the balance sheet at January 31, 2014. Assume no change in accounts payable.


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  • CreatedDecember 29, 2012
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