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a)
1.
Notes payable
Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.
Sales tax payable
The Company collects the tax from the customer when the sale is made on cash or on account, and periodically pays the collections to the state’s department of revenue. Many states are implementing sales taxes on purchases made on the internet also. Sales taxes are stated as percentage of the sales price.
Unearned revenue
It is an advance made by the buyer before receiving the product or service. In upcoming period seller will have an obligation to provide goods or perform the services to the buyer for the payment already received. It is a current liability until the goods are delivered or the service is performed.
Current liability
Current liability is an obligation that the companies need to pay from the remaining current assets or creation of other current liabilities within a fiscal year or the operating cycle whichever is higher.
To prepare: The
2.
To prepare: The journal entry to record performed service for customers who had made advance payments for $10,000.
3.
To prepare: The sales taxes collected from state treasurer’s department on 14th January 2015.
4.
To Prepare: The journal entry to record sale of 900 units of new product on credit at $50 per unit, plus 8% sales taxes on 20th January 2015.
5.
To prepare: The journal entry to record the issuance of 5% notes payable from Company A on January 1, 2015.
6.
To prepare: The journal entry to record the cash proceeds from sales revenue of $12,420 that includes sales tax on January 25, 2015.
b)
To prepare: The
c)
To prepare: The current liabilities section of the
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