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