Reference no: EM132997825

On January 1, 2021, Sheridan Software Company's general ledger contained these liability accounts:

Accounts Payable $ 53,200

Unearned Revenue-Loyalty Program 4,850

CPP Payable 1,350

EI Payable 725

HST Payable 9,730

Income Tax Payable 3,860

Unearned Revenue 15,500

Vacation Pay Payable 9,030

In January, the following selected transactions occurred:

Jan.

2 Issued a $ 46,500, four-month, 6% note. Interest is payable at maturity.

5 Sold merchandise for $ 11,600 cash, plus 13% HST. The cost of this sale was $ 5,600. Sheridan Software uses a perpetual inventory system.

12 Provided services for customers who had paid $ 11,400 cash in advance. The payment included HST of $ 1,312.

14 Paid the Receiver General (federal government) for sales taxes collected in December 2020.

15 Paid the Receiver General for amounts owing from the December payroll for CPP, EI, and income tax.

17 Paid $ 15,850 to creditors on account.

20 Sold 5,460 units of a new product on account for $ 60 per unit, plus 13% HST. This new product has a one-year warranty. It is estimated that 9% of the units sold will be returned for repair at an average cost of $10 per unit. The cost of this sale was $ 28 per unit.

29 During the month, provided $ 2,300 of services for customers who redeemed their customer loyalty rewards. Assume that HST of $ 305 is included in the $ 2,300.

31 Issued 31,650 loyalty rewards points worth $1 each. Based on past experience, 20% of these points are expected to be redeemed. Cash sales related to the issuance of the loyalty points were $ 255,400.

31 Recorded and paid the monthly payroll. Gross salaries were $ 22,150. Amounts withheld included CPP of $ 709, EI of $ 379, and income tax of $ 3,549.

Question 1: Record service revenue for cash previously received.

Question 2: Record sales on account plus HST.