On January 1, 2022, the ledger of Crane Company contains these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue During January, these selected transactions occurred. Jan.5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. 12 14 20 $52,000 7,400 17,000 21 25 Performed services for customers who had made advance payments of $11,000. (Credit Service Revenue.) Paid state revenue department for sales taxes collected in December 2021 ($7,400). 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. Borrowed $24,750 from Girard Bank on a 3-month, 8%, $24,750 note. Sold merchandise for cash totaling $8,208, which includes 8% sales taxes.
On January 1, 2022, the ledger of Crane Company contains these liability accounts. Accounts Payable Sales Taxes Payable Unearned Service Revenue During January, these selected transactions occurred. Jan.5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. 12 14 20 $52,000 7,400 17,000 21 25 Performed services for customers who had made advance payments of $11,000. (Credit Service Revenue.) Paid state revenue department for sales taxes collected in December 2021 ($7,400). 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. Borrowed $24,750 from Girard Bank on a 3-month, 8%, $24,750 note. Sold merchandise for cash totaling $8,208, which includes 8% sales taxes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Do not give answer in image formate
Transcribed Image Text: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 accou
titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
No.
1
2
Date
Jan. 31 V
Jan. 31 V
Account Titles and Explanation
Interest Expense
Interest Payable
Warranty Expense
Warranty Llability
- Your answer is partially correct.
Current Liabilitles
Accounts Payable
Sales Taxes Payable
Notes Payable
Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in accounts payable.
Crane Company
Balance Sheet (Partial)
Unearned Service Revenue
Interest Payable
Warranty Liability
Debit
Total Current Liabilities
January 31, 2022
577.50
283.50
Credit
577.50
283.50
69
$
52,000
Transcribed Image Text:On January 1, 2022, the ledger of Crane Company contains these liability accounts.
Accounts Payable
Sales Taxes Payable
Unearned Service Revenue
During January, these selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
Performed services for customers who had made advance payments of $11,000. (Credit Service Revenue.)
Paid state revenue department for sales taxes collected in December 2021 ($7,400).
12
14
20
$52,000
7,400
17,000
21
25
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.
Borrowed $24,750 from Girard Bank on a 3-month, 8%, $24.750 note.
Sold merchandise for cash totaling $8,208, which includes 8% sales taxes.
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