The following post closing trial balance was drawn from the accounts
The following post-closing trial balance was drawn from the accounts of Southern Timber Co. as of December 31, 2015:
Transactions for 2016
1. Acquired additional $20,000 cash from the issue of common stock.
2. Purchased $80,000 of inventory on account.
3. Sold inventory that cost $61,000 for $98,000. Sales were made on account.
4. Wrote off $1,500 of uncollectible accounts.
5. On September 1, Southern loaned $10,000 to Pine Co. The note had a 6 percent interest rate and a one-year term.
6. Paid $24,500 cash for salaries expense.
7. Collected $99,000 cash from accounts receivable.
8. Paid $78,000 cash on accounts payable.
9. Paid a $5,000 cash dividend to the stockholders.
10. Accepted credit cards for sales amounting to $5,000. The cost of goods sold was $3,500. The credit card company charges a 4% service charge. The cash has not been received.
11. Estimated uncollectible accounts expense to be 1 percent of sales on account.
12. Recorded the accrued interest at December 31, 2016.
Required
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.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help