5/3/24, 11:21 AM Question 1 of 2 - Homework: Chapter 11

Homework: Chapter 11

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On January 1, 2027, the ledger of Swifty Company contains these liability accounts.

Accounts Payable $51,000

Sales Taxes Payable 8,400

Unearned Service Revenue 15,500

During January, these selected transactions occurred.

Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.

12 Performed services for customers who had made advance payments of $11,000. (Credit Service Revenue.)

14 Paid state revenue department for sales taxes collected in December 2021 ($8,400).

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.

21 Borrowed $29,250 from Girard Bank on a 3-month, 8%, $29,250 note.

25 Sold merchandise for cash totaling $11,772, which includes 8% sales taxes.

(a)

 Your answer is correct.

Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent
manually. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit

Cash 20520

Sales Taxes Payable 1520

Sales Revenue 19000

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5/3/24, 11:21 AM Question 1 of 2 - Homework: Chapter 11

Homework: Chapter
Unearned Service11
Revenue 11000

Service Revenue You’ve completed all of the work in this assignment. 11000

Sales Taxes Payable 8400

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Cash 8400

Accounts Receivable 48600

Sales Taxes Payable 3600

Sales Revenue 45000

Cash 29250

Notes Payable 29250

Cash 11772

Sales Taxes Payable 872

Sales Revenue 10900

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List of Accounts

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(b)

 Your answer is correct.

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 account titles are automatically indented when amount is entered. Do not indent manually. Record
journal entries in the order presented in the problem.)

No. Date Account Titles and Explanation Debit Credit

1. Interest Expense 65

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5/3/24, 11:21 AM Question 1 of 2 - Homework: Chapter 11

Homework: Chapter 11
Interest Payable

2. Warranty Expense You’ve completed all of the work in this assignment. 3150

Warranty Liability 3
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List of Accounts

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(c)

 Your answer is correct.

Prepare the current liabilities section of the balance sheet at January 31, 2027. Assume no change in accounts payable.

Swifty Company
Balance Sheet (Partial)
January 31, 2027

Current Liabilities

Notes Payable $ 29250

Sales Taxes Payable 5992

Accounts Payable 51000

Unearned Service Revenue 4500

Warranty Liability 3150

Interest Payable 65

Total Current Liabilities $ 93957

eTextbook and Media

List of Accounts
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5/3/24, 11:21 AM Question 1 of 2 - Homework: Chapter 11

Homework: Chapter 11
Attempts: 1 of 3 used
You’ve completed all of the work in this assignment.

Question 1 of 2 50 / 50

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