Listed below are a few transactions and events of Piper Company Piper Company re

Question

Listed below are a few transactions and events of Piper Company Piper Company records an adjusting entry for $360,000 of previously unrecorded cash sales (costing $180,000) and its sales taxes at a rate of 7% The company earned $72,000 of $180,000 previously received in advance for services Prepare any necessary adjusting entries at December 31, 2013, for Piper Company's year -end financial statements for each of the above separate transactions and ovents Piper Company uses a perpetual inventory system

Explanation / Answer

General journal Debit credit a cash    [360000(1+.07)] 385200 sales 360000 sales tax payable 25200 [cash sales made] cost of goods sold 180000 Merchandise inventory 180000 [being cost of sales made] b Unearned service revenue 72000 service revenue 72000 [being services earned during the year]

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