Adjusting entries and Current Liabilities for Van Manen
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I need extra help on (c). How do I prepare the current liabilities section of the balance sheet?
P2-1A On January 1, 2002, the ledger of Van Manen Company contains the following liability
accounts.
Accounts Payable 52,000
Sales Tax Payable 7,500
Unearned Service Revenue 16,000
During January the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $16,632, which includes 8% sales taxes.
12 Provided services for customers who had made advance payments of
$9,000. (Credit Service Revenue)
14 Paid state revenue department for sales taxes collected in December 2001
($7,500).
20 Sold 500 units of a new product on credit at $50 per unit, plus 8% sales
tax.
21 Borrowed $18,000 from Castle Bank on a 3-month, 10%, $18,000 note.
25 Sold merchandise for cash totaling $11,340, which includes 8% sales taxes.
Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entry at January 31 for the outstanding notes payable.
(c) Prepare the current liabilities section of the balance sheet at January 31, 2002. Assume no change in accounts payable.
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Solution Summary
The solution has journal entries for some transactions, the related adjusting entries at the end of the month and the current liabilities section of the balance sheet
Solution Preview
The entries for a and b are in the attached file. The current liabilities would be Sales Tax Payable, Accounts Payable and unearned revenue which are existing. The notes payable for 3 months is a current ...
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