Prepare current liability entries, adjusting entries, and current liabilities section
On Jan. 1, 2006 the ledger of Shumway software co. contains the following liability accounts.
Accounts payable: $42,500
Sales Taxes payable: 5,800
Unearned service revenue: 15,000
During January the following selected transactions occurred.
Jan. 1: Borrowed $15,000 in cash from Amsterdam bank on a 4 month 8%, $15,000 note.
Jan. 5: Sold merchandise for cash totaling $10,400 which includes 4% sales taxes.
Jan. 12: Provided services for customers who had made advance payments of $9,000.(credit service revenue)
Jan. 14: paid state treasurer's dept. for sales tax collected in Dec. 2005, $5,800.
Jan 20: Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.
Jan 25: Sold merchandise for cash totaling $12,480, which includes 4% sales tax.
Instructions: (in excel if possible)
a. Journalize the January transactions.
b. Journalize the adjusting entry at January 31 for the outstanding notes payable.
c. Prepare the current liabilities section of the balance sheet at Jan 31,2006. Assume no change in accounts payable. (current liability total $65,936)