The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as...

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The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable Common stock Retained earnings $ 9,000 41,000 $ 2,500 78,000 21,000 50,000 54,500 Transactions for Year 2 1. Acquired an additional $20,000 cash from the issue of common stock. 2. Purchased $85,000 of inventory on account. 3. 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. 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. Uncollectible accounts are estimated to be 1 percent of sales on account. 11. Recorded the accrued interest at December 31, Year 2 (see item 5). Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for Year 2. The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable Common stock Retained earnings $ 9,000 41,000 $ 2,500 78,000 21,000 50,000 54,500 Transactions for Year 2 1. Acquired an additional $20,000 cash from the issue of common stock. 2. Purchased $85,000 of inventory on account. 3. 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. 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. Uncollectible accounts are estimated to be 1 percent of sales on account. 11. Recorded the accrued interest at December 31, Year 2 (see item 5). Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for Year 2.

Answer rating: 100% (QA)

a Organizing the transaction data in accounts under an accounting equation Assets 1 Cash Beginning balance 9000 Transaction 1 20000 issue of common st... View the full answer