Date Account Titles and Explanation Debit Credit LINK TO TEXT LINK TO TEXT Date

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Account Titles and Explanation

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Account Titles and Explanation

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On January 1, 2017, the ledger of Accardo Company contains the following liability accounts.
Accounts Payable $56,100 Sales Taxes Payable 7,300 Unearned Service Revenue 15,800
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. 12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2016 ($7,300). 20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. 21 Borrowed $22,500 from Girard Bank on a 3-month, 8%, $22,500 note. 25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.

Explanation / Answer

Ans-

S.No. Date Accounts Dr. Cr. Calcualtion 1 5 Bank      20,520.00 Sales 19,000.00 Sales Tax Payable     1,520.00 (20520/108%*8% 2 12 Unearned Service Revenue      10,000.00 Service Revenue 10,000.00 3 14 Sales Tax Payable        7,300.00 Cash     7,300.00 4 20 Account Receivable      48,600.00 Sales 45,000.00 900*50 Sales Tax Payable     3,600.00 45000*8% 5 21 Cash      22,500.00 Notes Payable 22,500.00 6 25 Bank      12,420.00 Sales 11,500.00 Sales Tax Payable        920.00 (12420/108%*8% 7 Interest Expesnes 50 Interest Payable 50 Monthly Interest 22500*8%/12 Monthly 150 (21 to 31st) 50

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