On January 1, 2008, the ledger of Mane Company contains the following liability accounts.

During January the following selected transactions occurred.

Instructions

(a) Journalize the January transactions.

(b) Journalize the adjusting entries at January 31 for (1) the outstanding notes payable, and (2)
estimated warranty liability, assuming warranty costs are expected to equal 7% of sales of the new product.

(c) Prepare the current liabilities section of the balance sheet at January 31, 2008. Assume no change in accounts payable.

Transcribed Image Text:

Accounts Payable $52,000 Sales Taxes Payable 7,700 Unearned Service Revenue 16,000