The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of
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The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1.
Debit | Credit | |
---|---|---|
Cash | $5,480 | |
Accounts receivable | 19,700 | |
Allowance for doubtful accounts | $1,870 | |
Inventory | 25,080 | |
Accounts payable | 7,940 | |
Common stock | 19,400 | |
Retained earnings | 21,050 | |
Totals | $50,260 | $50,260 |
Transactions for Year 2
- LGS acquired an additional $9,000 cash from the issue of common stock.
- LGS purchased $60,100 of inventory on account.
- LGS sold inventory that cost $61,300 for $97,000. Sales were made on account.
- The company wrote off $1,340 of uncollectible accounts.
- On September 1, LGS loaned $8,000 to Eden Company The note had an 9 percent interest rate and a one-year term.
- LGS paid $15,170 cash for operating expenses.
- The company collected $75,180 cash from accounts receivable.
- A cash payment of $45,990 was paid on accounts payable.
- The company paid a $4,500 cash dividend to the stockholders.
- Accepted credit cards for sales amounting to $3,600. The cost of goods sold was $1,900. The credit card company charges a 4 percent service charge. The cash has not been received.
- Uncollectible accounts are estimated to be 3 percent of sales on account.
- Recorded the accrued interest at December 31, Year 2.
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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