On January 1, 2014, the ledger of Shumway Company contains the following liabili
ID: 2487295 • Letter: O
Question
On January 1, 2014, the ledger of Shumway Company contains the following liability accounts.
During January, the following selected transactions occurred.
Journalize the January transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Jan. 21
Jan. 25
Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the DeKalb Bank note.) (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
Prepare the current liabilities section of the balance sheet at January 31, 2014. Assume no change in accounts payable. (Round answers to 0 decimal places, e.g. 125.)
$
Accounts Payable $52,290 Sales Taxes Payable 7,040 Unearned Service Revenue 16,780Explanation / Answer
(a) Jan. 5 Cash 19,153
Sales ($19,153 ÷ 107%)........................................ 17,900
Sales Taxes Payable.............................................. 1,253
($19,153 – $17,900)
12 Unearned Service Revenue............................................ 11,800
Service Revenue.................................................... 11,800
14 Sales Taxes Payable........................................................ 7,040
Cash....................................................................... 7,040
20 Accounts Receivable....................................................... 31,298
Sales....................................................................... 29,250
Sales Taxes Payable.............................................. 2,048
(585 X $50 X 7%)
21 Cash 15.750
Notes Payable........................................................ 15,750
25 Cash 9,167
Sales ($9167 ÷ 107%)........................................... 8,567
Sales Taxes Payable.............................................. 600
($12,420 – $11,500)
(b) Jan. 31 Interest Expense............................................................. 35
Interest Payable.................................................... 35
($15,750 X 8% X 1/12 =
($105; $105 X 1/3)
(c) Current liabilities
Notes payable............................................................................................................ $15,750
Accounts payable...................................................................................................... 52,290
Unearned service revenue ($16,780 – $11,800)...................................................... 4,980
Sales taxes payable ($1,253 + $2,048 + $600).......................................................... 3,901
Interest payable......................................................................................................... 35
Total current liabilities................................................................................... $76,956
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