Question

In: Accounting

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.)

Solutions

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 (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

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