On January 1, 2015, the ledger of Werth Company contains the following liability accounts. Accounts Payable .......

Question:

On January 1, 2015, the ledger of Werth Company contains the following liability accounts.
Accounts Payable ....... $35,000
Sales Taxes Payable ...... 5,000
Unearned Service Revenue .... 12,000
During January, the following selected transactions occurred.
Jan. 1 Borrowed $30,000 in cash from Platteville Bank on a 4-month, 6%, $30,000 note.
5 Sold merchandise for cash totaling $11,130, which includes 6% sales taxes.
12 Performed services for customers who had made advance payments of $8,000.
(Credit Service Revenue.)
14 Paid state treasurer’s department for sales taxes collected in December 2014, $5,000.
20 Sold 750 units of a new product on credit at $44 per unit, plus 6% sales tax.
25 Sold merchandise for cash totaling $16,536, which includes 6% sales taxes.

Instructions
(a) Journalize the January transactions.
(b) Journalize the adjusting entry at January 31 for the outstanding note payable.
(c) Prepare the current liabilities section of the at January 31, 2015. Assume no change in accounts payable.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...