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.
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.
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