In: Accounting
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.) |
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 (900*50*1.08) | 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 | ||