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I am not understanding the sales tax portion which is causing the entire problem to be wrong. Can someone please take a look? Problem 11-1A
I am not understanding the sales tax portion which is causing the entire problem to be wrong. Can someone please take a look?
Problem 11-1A On January 1, 2014, the ledger of Accardo Company contains the following liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue $54,080 7,460 16,120 During January, the following selected transactions occurred. Jan. 5 Sold merchandise for cash totaling $14,904, which includes 8% sales taxes. 12 Performed services for customers who had made advance payments of $10,710. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2013 ($7,460). 20 Sold 850 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 $8,316, which includes 8% sales taxes. Your answer is partially correct. Try again. Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Jan. 5 Account Titles and Explanation Cash Debit Credit 14904 Sales Revenu Sales Taxes Jan. 12 13711.68 1192.32 Unearned Se 10710 Service Reve Jan. 14 Sales Taxes 10710 7460 Cash Jan. 20 Accounts Re 7460 54 Sales Revenu Sales Taxes Jan. 21 50 4 Cash 24750 Notes Payab Jan. 25 Cash 24750 8316 Sales Revenu 665.28 Sales Taxes 7650.72 SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is partially correct. Try again. 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.) No . 1. Date Account Titles and Explanation Jan. 31 Interest Expe Debit 206.25 Interest Paya 2. Jan. 31 Warranty Exp Credit 206.25 1009.89 Warranty Lia 1009.89 Your answer is partially correct. Try again. Prepare the current liabilities section of the balance sheet at January 31, 2014. Assume no change in accounts payable. Accardo Company Balance Sheet (Partial) January 31, 2014 Current Liabilities Notes Payab $ 24750 Accounts Pa 54080 Unearned Se 5410 Sales Taxes 21366.40 Warranty Lia 1009.89 Interest Paya 206.25 Total Current Liabilities $ 106822.54Step by Step Solution
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