Question

On January 1, 2015, the ledger of Accardo Company contains the following liability accounts. Accounts Payable $52,810 Sales Taxes Payable 8,770 Unearned Service Revenue 16,470 During January, the following selected transactions occurred. Jan. 5 Sold merchandise for cash totaling $21,384, which includes 8% sales taxes. 12 Performed services for customers who had made advance payments of $11,590. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2014 ($8,770). 20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. 21 Borrowed $29,250 from Girard Bank on a 3-month, 8%, $29,250 note. 25 Sold merchandise for cash totaling $11,556, which includes 8% sales taxes. Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 5 Jan. 12 Jan. 14 Jan. 20 Jan. 21 Jan. 25 SHOW LIST OF ACCOUNTS LINK TO TEXT Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the Girard Bank note.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 31 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable. Accardo Company Balance Sheet (Partial) January 31, 2014 $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Journal Entries are attached in the Word Document

Date	Journal	Amount (Dr) ($)	Amount (Cr) ($)
05 Jan	Cash on Hand Account                          Dr	21,384.00
	To Sales Account		19,800.00
	To Sales Tax Payable Account		1,584.00
	(Being merchandise sold on cash which includes 8% of Sales Tax Payable) Sales Tax = (21384/108)*100
Jan 12	Service Revenue                                               Dr	11,590.00
	To Advance from Customers		11,590.00
	(Being advance received from the customers for services performed)
Jan 14	Sales Tax Payable                                             Dr	8,770.00
	To Cash on Hand		8,770.00
	(Being Sales Tax of December 2014 paid to the Revenue Department)
Jan 20	Trade Receivables Account                                Dr	48,600.00
	To Sales Tax Payable		3,600.00
	To Sales Account		45,000.00
	(Being 200 units of goods sold on credit at $50 per unit and 8% sales Tax levied) (Sales = 900 * 50 = $45,000 Sales Tax Payable = $45000 * 8% = $3600)
Jan 21	Cash on hand Account                                      Dr	29,250.00
	To 8% Girard Bank Note		29,250.00
	(Being $29250 note Borrowed from Girard Bank at 8% for three-months)
Jan 25	Cash on hand Account                                      Dr	11,556.00
	To Sales Account		10,700.00
	To Sales Tax Payable Account		856.00
	(Being merchandise sold on cash which includes 8% of Sales Tax Payable) Sales Tax = (11556/108)*100
Jan 31	Unearned Service Revenue                                Dr	11,590.00
	To Service Revenue		11,590.00
	(Being Unearned Service Revenue booked as a liability as it has not yet been earned by the company and Service Revenue transferred to Revenue Account
Jan 31	Interest Expense                                               Dr	195.00
	To Interest Payable Account		195.00
	(Being Interest Expense of $195 booked as an Expenditure for current year and transferred to Liabilities Account as the amount has not been paid) (Interest Expense = {($29250 * 8%} * 3/12 * 1/3)

Balance Sheet (Liablities) of Accardo Company as as January 31, 2015

Particulars	Notes	Amount ($)
I Equities and Liabilities
A. Current Liabilities
1. Short-Term Borrowings
Loan from Bank - repayable on Demand		29,250.00
Trade Payables		52,810.00
Other Current Liabilities	1	45,885.00