Problem - Comprehensive accounting cycle problem
The following trial balance was prepared for Village Cycle Sales and Service on December 31, 2016, after closing entries were posted:
|
Account Title
|
Debit
|
Credit
|
|
Cash
|
$46,200
|
|
|
Accounts Receivable
|
21,300
|
|
|
Allowance for Doubtful Accounts
|
|
$1,350
|
|
Inventory
|
85,600
|
|
|
Accounts Payable
|
|
28,000
|
|
Common Stock
|
|
80,000
|
|
Retained Earnings
|
|
43,750
|
|
Totals
|
$153,100
|
$153,100
|
Village Cycle had the following transactions in 2017:
1. Purchased merchandise on account for $260,000.
2. Sold merchandise that cost $243,000 on account for $340,000.
3. Performed $80,000 of services for cash.
4. Sold merchandise for $60,000 to credit card customers. The merchandise cost $41,250. The credit card company charges a 5 percent fee.
5. Collected $348,000 cash from accounts receivable.
6. Paid $265,000 cash on accounts payable.
7. Paid $115,000 cash for selling and administrative expenses.
8. Collected cash for the full amount due from the credit card company (see item 4).
9. Loaned $50,000 to Lee Supply. The note had a 9 percent interest rate and a one-year term to maturity.
10. Wrote off $830 of accounts as uncollectible.
11. Made the following adjusting entries:
(a) Recorded three months' interest on the note at December 31, 2017 (see item 9).
(b) Estimated uncollectible accounts expense to be .5 percent of sales on account.
Required - 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 flows for 2017.