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    ledger of Shumway Software Company

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    On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts.

    Accounts Payable
    $42,500

    Sales Taxes Payable
    5,800

    Unearned Service Revenue
    15,000

    During January the following selected transactions occurred.

    Jan. 1
    Borrowed $15,000 in cash from Amsterdam Bank on a 4-month, 8%, $15,000 note.
    5
    Sold merchandise for cash totaling $10,400, which includes 4% sales taxes.

    12
    Provided services for customers who had made advance payments of $9,000. (Credit Service Revenue.)

    14
    Paid state treasurer's department for sales taxes collected in December 2005, $5,800.

    20
    Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.

    25
    Sold merchandise for cash totaling $12,480, which includes 4% sales taxes.

    Instructions

    Journalize the January transactions.
    Journalize the adjusting entry at January 31 for the outstanding notes payable.
    Prepare the current liabilities section of the balance sheet at January 31, 2006. Assume no change in accounts payable.

    (c) Current liability total $65,936

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    https://brainmass.com/business/current-liabilities/ledger-of-shumway-software-company-244452

    Solution Preview

    prepare current liability entries, adjusting entries, and current liabilities section
    ________________________________________
    On Jan. 1, 2006 the ledger of Shumway software co. contains the following liability accounts.

    Accounts payable
    $42,500

    Sales Taxes payable
    5,800

    Unearned service revenue
    15,000

    During January the following selected transactions occurred.
    Jan. 1: Borrowed $15,000 in cash from Amsterdam bank on a 4 month 8%, $15,000 note.
    Jan. 5: Sold merchandise for cash totaling $10,400 ...

    Solution Summary

    This solution is comprised of a detailed explanation to prepare current liability entries, adjusting entries, and current liabilities section.

    $2.19

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