The following post-closing list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 2: $ 6,460 18,860 Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable 1,805 25,530 10,880 Common stock 21,200 16,965 Retained earnings Transactions for Year 3 1. Acquired an additional $10,100 cash from the issue of common stock. 2. Purchased $59,300 of inventory on account. 3. Sold inventory that cost $63,000 for $93,300. Sales were made on account. 4. The company wrote off $1,110 of uncollectible accounts. 5. On September 1, LGS loaned $11,000 to Eden Co. The note had an 7 percent interest rate and a one-year term. 6. Paid $15,840 cash for operating expenses. 7. The company collected $71,880 cash from accounts receivable. 8. A cash payment of $52,850 was paid on accounts payable. 9. The company paid a $4,200 cash dividend to the stockholders. 10. Uncollectible accounts are estimated to be 2 percent of sales on account. 11. Recorded the accrued interest at December 31, Year 3 (see item 5).
The following post-closing list of accounts was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 2: $ 6,460 18,860 Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable 1,805 25,530 10,880 Common stock 21,200 16,965 Retained earnings Transactions for Year 3 1. Acquired an additional $10,100 cash from the issue of common stock. 2. Purchased $59,300 of inventory on account. 3. Sold inventory that cost $63,000 for $93,300. Sales were made on account. 4. The company wrote off $1,110 of uncollectible accounts. 5. On September 1, LGS loaned $11,000 to Eden Co. The note had an 7 percent interest rate and a one-year term. 6. Paid $15,840 cash for operating expenses. 7. The company collected $71,880 cash from accounts receivable. 8. A cash payment of $52,850 was paid on accounts payable. 9. The company paid a $4,200 cash dividend to the stockholders. 10. Uncollectible accounts are estimated to be 2 percent of sales on account. 11. Recorded the accrued interest at December 31, Year 3 (see item 5).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Educational Context: Preparing Financial Statements**
To effectively analyze the financial position of a company, it's crucial to prepare several financial documents, such as an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows. Here, we focus on constructing a "Statement of Changes in Stockholders' Equity" for a fictional company, Little Grocery Supplier (LGS), for the year ended December 31, Year 3.
### Key Components of the Statement of Changes in Stockholders' Equity
#### **Table: Statement Structure**
- **Title and Timeframe**:
- **Company**: Little Grocery Supplier (LGS)
- **Document**: Statement of Changes in Stockholders' Equity
- **Period**: For the Year Ended December 31, Year 3
#### **Financial Entries**:
1. **Beginning Common Stock**: Initial common stock amount at the beginning of the year (amount not specified and needs to be completed).
2. **Ending Common Stock**: Final common stock amount at the end of the year. In this template, it is indicated as $0, suggesting this value is yet to be entered or calculated.
3. **Beginning Retained Earnings**: Initial retained earnings at the start of the year (amount not specified and needs to be completed).
4. **Ending Retained Earnings**: Final retained earnings at the end of the year. In this template, it is indicated as $0, which also suggests a placeholder for the actual figure.
5. **Total Stockholders' Equity**: Represents the total equity at year-end, currently marked as $0, indicating it is not yet determined.
#### **Additional Instructions**:
- All final answers should be entered in whole dollars.
- Deductibles should be marked with a minus sign to ensure clarity in reporting negative figures.
**Note**: The table structure and placeholders emphasize the need for user input to complete the financial statement, highlighting interactive elements within educational financial software or websites.
![**Exercise 7-15A (Algo) Comprehensive Single-Cycle Problem LO 7-1, 7-5**
*[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:
| Account | Amount |
|---------------------------------|-----------|
| Cash | $ 6,460 |
| Accounts receivable | 18,860 |
| Allowance for doubtful accounts | 1,805 |
| Inventory | 25,530 |
| Accounts payable | 10,880 |
| Common stock | 21,200 |
| Retained earnings | 16,965 |
**Transactions for Year 3**
1. Acquired an additional $10,100 cash from the issue of common stock.
2. Purchased $59,300 of inventory on account.
3. Sold inventory that cost $63,000 for $93,300. Sales were made on account.
4. The company wrote off $1,110 of uncollectible accounts.
5. On September 1, LGS loaned $11,000 to Eden Co. The note had a 7 percent interest rate and a one-year term.
6. Paid $15,840 cash for operating expenses.
7. The company collected $71,880 cash from accounts receivable.
8. A cash payment of $52,850 was paid on accounts payable.
9. The company paid a $4,200 cash dividend to the stockholders.
10. Uncollectible accounts are estimated to be 2 percent of sales on account.
11. Recorded the accrued interest at December 31, Year 3 (see item 5).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdf9c49b9-ebc3-4254-9011-25d5959a8511%2Fabb50d09-80ba-41ef-bd2e-558a34b3e016%2Fsqz7h8a_processed.png&w=3840&q=75)
Transcribed Image Text:**Exercise 7-15A (Algo) Comprehensive Single-Cycle Problem LO 7-1, 7-5**
*[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:
| Account | Amount |
|---------------------------------|-----------|
| Cash | $ 6,460 |
| Accounts receivable | 18,860 |
| Allowance for doubtful accounts | 1,805 |
| Inventory | 25,530 |
| Accounts payable | 10,880 |
| Common stock | 21,200 |
| Retained earnings | 16,965 |
**Transactions for Year 3**
1. Acquired an additional $10,100 cash from the issue of common stock.
2. Purchased $59,300 of inventory on account.
3. Sold inventory that cost $63,000 for $93,300. Sales were made on account.
4. The company wrote off $1,110 of uncollectible accounts.
5. On September 1, LGS loaned $11,000 to Eden Co. The note had a 7 percent interest rate and a one-year term.
6. Paid $15,840 cash for operating expenses.
7. The company collected $71,880 cash from accounts receivable.
8. A cash payment of $52,850 was paid on accounts payable.
9. The company paid a $4,200 cash dividend to the stockholders.
10. Uncollectible accounts are estimated to be 2 percent of sales on account.
11. Recorded the accrued interest at December 31, Year 3 (see item 5).
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