The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2
ID: 2450901 • Letter: T
Question
The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2016, after the closing entries were posted:
account title debit credit
cash $125,000
account receivable 128,000
allowance for doubful accounts $19,500
inventory 431,000
account payable 98,000
common stock 465,000
retained earning 101,500
totals $684,000 $684,000
Tile, Et. had the following transactions in 2017:
1. Purchased merchandise on account for $595,000
2. Sold merchandise that cost $435,000 for $920,000 on account
3. Sold for $260,000 cash merchandise that had cost $166,000
4. Sold merchandise for $205,000 to credit card customers. The merchandise had cost $102,000. The credit card company charges a 3 percent fee.
5. Collected $650,000 cash from accounts receivalbe
6. Paid $625,000 cash on accounts payable
7. Paid $148,000 cash for selling and administrative expenses
8. Collected cash for the full amount due from the credit card company (see item 4)
9. Loaned $75,000 to J. Parks. The note had an 6 percent interest rate and a one year term to maturity
10. Wrote off $7,800 of accounts as uncollectible
11. Made the following adjusting entries:
a. Recorded uncollectible accounts expense estimated at 1 percent of sales on account
b. recorded seven months of accrued interest on the note at December 31, 2017 (see item 9)
Required:
a. Prepare general journal entries for these transactions, post the entries to T- accounts, and prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flow for 2017.
Explanation / Answer
The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2
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