1. Piper Company records an adjusting entry for $10,000,000 of previously unrecorded cash sales (costing $5,000,000) and its sales taxes at a rate of 4%. 2. The company earned $50,000 of $125,000 previously received in advance for services. Prepare any necessary adjusting entries at December 31, 2015, for Piper Company's year-end financial statements for each of the above separate transactions and events. (Piper has the policy of recording cash received in advance in balance sheet accounts.)

1.

Record the entry for cash sales and its sales taxes.

2.

Record cost of sales.

3.

The company earned $50,000 of $125,000 previously received in advance for services.