The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1. Debit $ 9,000 41,000 Credit Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payable Common stock Retained earnings $ 2,500 78,000 21,000 50, e00 54, 500 $ 128,800 Totals $ 128, 000 Transactions for Year 2 1. LGS acquired an additional $20,000 cash from the issue of common stock. 2. LGS purchased $85,000 of inventory on account. 3. LGS 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 Company The note had an 8 percent interest rate and a one-year term. 6. LGS 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. Accepted credit cards for sales amounting to $7,000. The cost of goods sold was $4,000. The credit card company charges a 4 percent service charge. The cash has not been received. 11. Uncollectible accounts are estimated to be 1 percent of sales on account. 12. Recorded the accrued interest at December 31, Year 2 (see item 5).

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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
$ 9,000
41,000
Credit
Cash
Accounts receivable
Allowance for doubtful accounts
Inventory
Accounts payab le
Common stock
Retained earnings
$ 2,500
78,000
21,000
50,000
54, 500
$ 128, 000
$ 128, 000
Totals
Transactions for Year 2
1. LGS acquired an additional $20,000 cash from the issue of common stock.
2. LGS purchased $85,000 of inventory on account.
3. LGS 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 Company The note had an 8 percent interest rate and a one-year term.
6. LGS 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 pald a $5,000 cash dividend to the stockholders.
10. Accepted credit cards for sales amounting to $7,000. The cost of goods sold was $4,000. The credit card company
charges a 4 percent service charge. The cash has not been received.
11. Uncollectible accounts are estimated to be 1 percent of sales on account.
12. Recorded the accrued interest at December 31, Year 2 (see item 5).
Transcribed Image Text:The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1. Debit $ 9,000 41,000 Credit Cash Accounts receivable Allowance for doubtful accounts Inventory Accounts payab le Common stock Retained earnings $ 2,500 78,000 21,000 50,000 54, 500 $ 128, 000 $ 128, 000 Totals Transactions for Year 2 1. LGS acquired an additional $20,000 cash from the issue of common stock. 2. LGS purchased $85,000 of inventory on account. 3. LGS 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 Company The note had an 8 percent interest rate and a one-year term. 6. LGS 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 pald a $5,000 cash dividend to the stockholders. 10. Accepted credit cards for sales amounting to $7,000. The cost of goods sold was $4,000. The credit card company charges a 4 percent service charge. The cash has not been received. 11. Uncollectible accounts are estimated to be 1 percent of sales on account. 12. Recorded the accrued interest at December 31, Year 2 (see item 5).
b. Open T-accounts and record the beginning balances and the Year 2 transactions.
Answer is not complete.
Cash
Accounts Payable
Beginning Balance
9,000
19,000 ४
Beginning Balance
92,000 O8
5,000 O9.
1.
20,000
7.
161,000
Ending Balance
74,000
Ending Balance
Accounts Receivable
Common Stock
Beginning Balance
900
Beginning Balance
41,000
3a.
160,000 O
18,000
5.
10a
7,000 0
161,000
7.
Ending Balance
Ending Balance
28, 100
Retained Earnings
Allow. For Doubt. Acct.
2,500 O
Beginning Balance
Beginning Balance
900 O
1,670 0 11.
3,270
Ending Balance
Ending Balance
Transcribed Image Text:b. Open T-accounts and record the beginning balances and the Year 2 transactions. Answer is not complete. Cash Accounts Payable Beginning Balance 9,000 19,000 ४ Beginning Balance 92,000 O8 5,000 O9. 1. 20,000 7. 161,000 Ending Balance 74,000 Ending Balance Accounts Receivable Common Stock Beginning Balance 900 Beginning Balance 41,000 3a. 160,000 O 18,000 5. 10a 7,000 0 161,000 7. Ending Balance Ending Balance 28, 100 Retained Earnings Allow. For Doubt. Acct. 2,500 O Beginning Balance Beginning Balance 900 O 1,670 0 11. 3,270 Ending Balance Ending Balance
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