Date Account Titles and Explanation Debit Credit Jan. 5 Jan. 12 Jan. 14 Jan. 20

Question

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 (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.

Date/

Account Titles and Explanation/

Debit

/Credit

1. Jan 31

2. Jan 31

Accardo Company
Balance Sheet (Partial)
January 31, 2014

On January 1, 2014, the ledger of Accardo Company contains the following liability accounts.
Accounts Payable $55,890 Sales Taxes Payable 7,720 Unearned Service Revenue 16,650
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $13,284, which includes 8% sales taxes. 12 Performed services for customers who had made advance payments of $10,120. (Credit Service Revenue.) 14 Paid state revenue department for sales taxes collected in December 2013 ($7,720). 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 $29,250 from Girard Bank on a 3-month, 8%, $29,250 note. 25 Sold merchandise for cash totaling $8,640, which includes 8% sales taxes.

Explanation / Answer

1)

2)

3)

Date Account Titles and Explanation Debit Credit Jan. 5 Cash                        13,284 Sales Revenue                                           12,300 Sales Taxes Payable                                                 984 Jan. 12 Unearned Service Revenue                        10,120 Service Revenue                                           10,120 Jan. 14 Sales Taxes Payable                           7,720 Cash                                             7,720 Jan. 20 Accounts Recievable                        45,900 Sales Revenue                                           42,500 Sales Taxes Payable                                             3,400 Jan. 21 Cash                        29,250 Notes Payable                                           29,250 Jan. 25 Cash                           8,640 Sales Revenue                                             8,000 Sales Taxes Payable                                                 640

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