The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier
(LGS) as of December 31, 2015:
Transactions for 2016
1. LGS acquired additional $20,000 cash from the issue of common stock.
2. LGS purchased $85,000 of inventory on account.
3. LGS sold inventory that cost $91,000 for $160,000. Sales were made on account.
4. The company wrote off $900 of uncollectible accounts.
5. On September 1, LGS loaned $18,000 to Eden Co. The note had an 8 percent interest rate and a one-year term.
6. LGS paid $19,000 cash for operating expenses.
7. The company collected $161,000 cash from accounts receivable.
8. A cash payment of $92,000 was paid on accounts payable.
9. The company paid a $5,000 cash dividend to the stockholders.
10. Accepted credit cards for sales amounting to $7,000. The cost of goods sold was $4,000. The credit card company charges a 4% service charge. The cash has not been received.
11. Uncollectible accounts are estimated to be 1 percent of sales on account.
12. Recorded the accrued interest at December 31, 2016.
a. Record the above transactions in general journal form.
b. Open T-accounts and record the beginning balances and the 2016 transactions.
c. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2016.