On January 1, 2020, the ledger of Bramble Company contains the following liability accounts. Accounts Payable...

On January 1, 2020, the ledger of Bramble Company contains the following liability accounts.

Accounts Payable		$51,000
Sales Taxes Payable		9,000
Unearned Service Revenue		16,500

During January, the following selected transactions occurred.

Jan. 5		Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
12		Performed 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 2019 ($9,000).
20		Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty.
21		Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
25		Sold merchandise for cash totaling $9,828, which includes 8% sales taxes. Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

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Expert Solution

Journal entries

Date	account and explanation	debit	credit

Jan 5	Cash	20520
	Sales revenue (20520*100/108)		19000
	Sales tax payable		1520

Jan 12	Account receivable	10000
	Service revenue		10000

Jan 14	Sales tax payable	9000
	Cash		9000

Jan 20	Account receivable (900501.08)	48600
	Sales revenue		45000
	Sales tax payable		3600

Jan 21	Cash	27000
	Notes payable		27000

Jan 25	Cash	9828
	Sales revenue (9828*100/108)		9100
	Sales tax payable		728

ekkarill92 answered 2 years ago

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