Question

P10.1A (LO 1,5) On January 1, 2020, the ledger of Accardo Company contains the following liability accounts. Accounts Payable $52,000 Sales Taxes Payable 7,700 Unearned Service Revenue 16,000 During January, the following selected transactions occurred. Jan. 5 12 14 20 21 25 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) Paid state revenue department for sales taxes collected in December 2019 ($7,700). Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note. Sold merchandise for cash totaling $12,420, which includes 8% sales taxes. Instructions a. Journalize the January transactions, b. Journalize the adjusting en sy at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.) c. Prepare the current liabilities section of the balance sheet at January 31, 2020. Assume no change in accounts payable. Blanco Company. Blanco prepares financial

need the answers to c and d

Answer 1

a)
Date	Account Titles & Explanation	Debit	Credit
Jan. 5	Cash	$ 20,520
	Sales Revenue		$ 18,878.4
	Sales Taxes Payable (20520 x 8%)		$   1,641.6
Jan.12	Unearned Service Revenue	$   10,000
	Service Revenue		$   10,000
Jan.14	Sales Taxes Payable	$   7,700
	Cash		$   7,700
Jan.20	Accounts Receivables (900 units x $50)	$ 45,000
	Sales revenue =		$ 41,400
	Sales Taxes Payable = 45000 x 8%		$   3,600
Jan.21	Cash	$ 27,000
	Notes payable 8% 3 Month		$ 27,000
Jan.25	Cash	$ 12,420
	Sales Revenue		$ 11,426.4
	Sales Taxes Payable (12420 x 8%)		$   993.6
b)
Jan.31	Interest Expenses = 27000 x 8% x .33/12	$      60
	Interest Payable		$      60

c) Prepare the current liabilities section of the balance sheet at January 31, 2020
Assume no change in accounts payable.
Accardo Company
Balance Sheet (Partial)
January 31, 2017
Current liabilities
Notes Payable	$ 27,000
Accounts Payable	$ 52,000
Unearned service revenue (16000 -10000)	$ 6,000
Sales taxes payable (1,641.6 + 3,600 + 993.6)	$ 6,235.2
Interest payable	$ 60
Total current liabilities	$ 91,295.2