Required information

Exercise 7-15A (Static) Comprehensive single-cycle problem LO 7-1, 7-5

Skip to question

[The following information applies to the questions displayed below.]

The following post-closing list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 2:

Cash	$ 9,000
Accounts receivable	41,000
Allowance for doubtful accounts	2,500
Inventory	78,000
Accounts payable	21,000
Common stock	50,000
Retained earnings	54,500

Transactions for Year 3

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 Company. 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 3 (see item 5).

Exercise 7-15A (Static) Part b

b. Prepare an income statement, a statement of changes in stockholders equity, a balance sheet, and a statement of cash flows for Year 3.