The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, 2017:
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 2018
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 Co. 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 to the stockholders.
10. Uncollectible accounts are estimated to be 1 percent of sales on account.
11. Recorded the accrued interest at December 31, 2018 (see item 5).
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a statement of changes in stockholders’ equity, a balance sheet, anda statement of cash flows for 2018.
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