Exercise 5-13A (Static) Comprehensive single-cycle problem LO 5-1, 5-4The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1:CashAccounts receivableAllowance for doubtful accountsInventoryAccounts payableCommon stockRetained earningsTransactions for Year 2:1. 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 $18,0006. 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 2 (see item 5).Req ARequireda. 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, and a statement of cash flows forYear 2.Complete this question by entering your answers in the tabs below.EventReq B IncomeStatementBalanceCash+$9,00041,000Eden Company The note had an 8 percent interest rate and a one-year term.Req BStatement ofChanges+$2,50078,00021,00050,00054,500Organize the transaction data in accounts under an accounting equation.Note: Enter any decreases to account balances with a minus sign. Do not round intermediate calculations. Leave cells blank if no input is needed.Req B BalanceSheetNet Realizable Value ofAccounts ReceivableAssets+Req BStatementCash Flows+ Inventory+LITTLE GROCERY SUPPLIER (LGS)Accounting Equation for the Year 2NotesInterestReceivable Receivable= Liabilities +AccountsPayable++Stockholders' EquityRetainedEarningsCommonStockAccounts Titles for Retained Earnings

Every company maintains its records under which it prepares the financial statements which include…

The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: $9,000 41,000 Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable Common stock Retained earnings Transactions for Year 2: $2,500 78,000 21,000 50,000 54,500

The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: $9,000 41,000 Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable Common stock Retained earnings Transactions for Year 2: $2,500 78,000 21,000 50,000 54,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Exercise 5-13A (Static) Comprehensive single-cycle problem LO 5-1, 5-4
The following list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1:
Cash
Accounts receivable
Allowance for doubtful accounts
Inventory
Accounts payable
Common stock
Retained earnings
Transactions for Year 2:
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
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 2 (see item 5).
Req A
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, and a statement of cash flows for
Year 2.
Complete this question by entering your answers in the tabs below.
Event
Req B Income
Statement
Balance
Cash
+
$9,000
41,000
Eden Company The note had an 8 percent interest rate and a one-year term.
Req B
Statement of
Changes
+
$2,500
78,000
21,000
50,000
54,500
Organize the transaction data in accounts under an accounting equation.
Note: Enter any decreases to account balances with a minus sign. Do not round intermediate calculations. Leave cells blank if no input is needed.
Req B Balance
Sheet
Net Realizable Value of
Accounts Receivable
Assets
+
Req B
Statement
Cash Flows
+ Inventory
+
LITTLE GROCERY SUPPLIER (LGS)
Accounting Equation for the Year 2
Notes
Interest
Receivable Receivable
= Liabilities +
Accounts
Payable
+
+
Stockholders' Equity
Retained
Earnings
Common
Stock
Accounts Titles for Retained Earnings

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