On January 1, 2011, the ledger of Zaur Company contains

| September 29, 2018

On January 1, 2011, the ledger of Zaur Company contains the following liability accounts.Accounts Payable ……………………..$52,000Sales Taxes Payable ……………………..7,700Unearned Service Revenue …………….16,000During January the following selected transactions occurred.Jan. 5 Sold merchandise for cash totaling $17,280, which includes 8% sales taxes.12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue.)14 Paid state revenue department for sales taxes collected in December 2010 ($7,700).20 Sold 600 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 $18,000 from UCLA Bank on a 3-month, 9%, $18,000 note.25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.Instructions(a) Journalize the January transactions.(b) 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.(c) Prepare the current liabilities section of the balance sheet at January 31, 2011. Assume no change in accounts payable.

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