Question

On January 1, 2017, the ledger of Accardo Company contains the following liability accounts.

Answer 1

Answer:

Cash   21,492 debit

   Sales Revenue   19,900 credit

   Sales tax payable 1,592 credit

Unearned Service Revenue   10,000 debit

         Service Revenue                 10,000 credit

Sales tax payable 7,100 debit

             Cash                   7,100 credit

Accounts Receivables 48,600 debit

         Sales Revenues        45,000 credit

         Sales tax payable       3,600 credit

Cash                  29,250 debit

    Notes Payables      29,250 credit

Cash                    12,744 debit

         Sales Revenues        11,800 credit

         Sales tax payable         944 credit

interest expense    156 debit

     interest payable      156 credit

warranty expense   340.2 debit

    warrnaty liability              340.2 credit

Explanation:

21,492 / (1 + 0.08) = 19,900 sales revenue

21,492 -   19,900   =   1,592 sales tax

900 x 50 = 45,000

45,000 x 0.08 = 3,600

12,744 / 1.08 = 11,800

12,744 - 11,800 = 944

interest on the note:

29,250 x 0.08 x 6days / 90 days = 156

warranty liability:

48,600 x 7% expected warranty cost = 340.2