QUESTION #1 Instructions: (A) Journalize the January transactions. (B) Journalize the adjusting entry at January 31 for interest on outstanding notes payable to DeKalb Bank. (C) Prepare the current liabilities section of the statement of financial position at January 31, 2017. Assume no change in accounts payable.
COMPANY INFO: On January 1, 2017, the ledger of Shumway Ltd. contains the following liability accounts Accounts Payable . 52,000 Sales Tax Payable . 5,800 Unearned Service Revenue .. 13,000 During January, the following selected transactions occurred. Jan. 1 Borrowed 14,000 from DeKalb Bank on a 3-month, 6%, 14.000 note. 6 Sold merchandise for cash totaling 22,470 which includes selling price plus 7% sales tax. 8 Received 10,000 in advance payment for services to be delivered on January 30, 2017. 14 Paid tax authorities for sales taxes collected in December 2016 (5,800). 20 Sold 700 units of a new product on credit at 52 per unit, plus 7% sales tax. 25 Sold merchandise for cash totaling 12,947, which includes 7% sales taxes. 30 Delivered services for customers who had made advance payment of 10,000 on January 8, 2017.
GENERAL JOURNAL
(a)
Jan	Account Title	Debit	Credit
1
	Account Title	Debit	Credit
6
	Account Title	Debit	Credit
8
	Account Title	Debit	Credit
14
	Account Title	Debit	Credit
20
	Account Title	Debit	Credit
25
	Account Title	Debit	Credit
30
(b)
Jan	Account Title	Debit	Credit
31

(c)

Instructions: Post above journal entries to the following T-accounts:

select T-Accounts

CASH

ACCOUNTS PAYABLE

SALES TAX PAYABLE

SALES REVENUE

Bal. 52,000

Bal. 5,800

ACCOUNTS RECEIVABLE

NOTES PAYABLE

INTEREST PAYABLE

SERVICE REVENUE

UNEARNED SERVICE REVENUE

INTEREST EXPENSE

Bal. 13,000

(c)

Instructions: Prepare CURRENT LIABILITIES section of Shumways statement of financial position at January 31, 2017.

Your response: SHUMWAY LTD. Partial Statement of Financial Position January 31, 2017 Current Liabilities Accounts Payable Notes Payables . Unearned Service Revenue .. Sales Tax Payable Interest Payable .. Total current liabilities ..