Answer:
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
Dr Cash 20,520
Cr Sales revenue 19,000
Cr Sales taxes payable 1,520
12 Performed services for customers who had made advance payments of $10,500. (Credit Service Revenue.)
Dr Unearned revenue 10,500
Cr Service revenue 10,500
14 Paid state revenue department for sales taxes collected in December 2019 ($7,200).
Dr Sales taxes payable 7,200
Cr Cash 7,200
20 Sold 900 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.
Dr Cash 48,600
Cr Sales revenue 45,000
Cr Sales taxes payable 3,600
*An additional entry for recording warranty liability must be made but we are not given any estimated warranty costs.
21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
Dr Cash 27,000
Cr Notes payable 27,000
25 Sold merchandise for cash totaling $7,884, which includes 8% sales taxes.
Dr Cash 7,884
Cr Sales revenue 7,300
Cr Sales taxes payable 584
