Question

Problem 11-01A a-c (Video) On January 1, 2020, the ledger of Sunland Company contains the following liability accounts. Accounts Payable $56,500 Sales Taxes Payable 7,900 Unearned Service Revenue 15,500 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 $11,000. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2019 ($7,900). 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 $24,750 from Girard Bank on a 3-month, 8%, $24,750 note. 25 Sold merchandise for cash totaling $11,016, 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.) Date Account Titles and Explanation Debit Credit

Journalize the adjusting entries at January 31 for (1) the outstanding notes payable, and (2) estimated warranty liability, assuming warranty costs are expected to equal 7% of sales of the new product. (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. Record journal entries in the order presented in the problem.) No. Date Account Titles and Explanation Debit Credit 1. 2.

Answer 1

Solution 11 Journal entries : Date Account Hite and Explanation Debit Gedet 5-1-20 cash account 20520 19000 Sales reverve (20520/102100) Sales Tax payabte (20520/108*8) 1520 12-1-20 revenue 11000 | unearned Seavice Service revenue 11000 14-1-20. 7900 Sales Tax payable cash account 7900 20-1-20 48600 Accounts receivable Sales revenue (900x50) Sales Tax payable [ 45000 X 8% 45000 3600 21-1-20 cash account 74750 Notes payable 24750 25-1-20 11016 10200 cash accent sales revenue [11016/108x100] Sales Tax payable [11016/108 X8] 816

2) Adjusting entries :- Date Account title and Explanations , Debit Gredet 55 31-1-20 Interest Expenses Interest payable (74750 48% %10/360) 55 3150 31-1-20 Warranty Expensez Estimated warranty Leabilities [ 45000 x 74] 3150 Note: Wargauty Expense { $ 70% Sales revenue of new proclvet only fel 45000