The following post-closing trial balance was drawn from the accounts of Spruce Timber Co. as of December
Question:
The following post-closing trial balance was drawn from the accounts of Spruce Timber Co. as of December 31, 2011.
Transactions for 2012
1. Acquired an additional \(\$ 10,000\) cash from the issue of common stock.
2. Purchased \(\$ 60,000\) of inventory on account.
3. Sold inventory that cost \(\$ 62,000\) for \(\$ 95,000\). Sales were made on account.
4. Wrote off \(\$ 1,100\) of uncollectible accounts.
5. On September 1 , Spruce loaned \(\$ 9,000\) to Pine Co. The note had a 7 percent interest rate and a one-year term.
6. Paid \(\$ 15,800\) cash for salaries expense.
7. Collected \(\$ 80,000\) cash from accounts receivable.
8. Paid \(\$ 52,000\) cash on accounts payable.
9. Paid a \(\$ 5,000\) cash dividend to the stockholders.
10. Accepted credit cards for sales amounting to \(\$ 3,000\). The cost of goods sold was \(\$ 2,000\). The credit card company charges a \(4 \%\) service charge. The cash has not been received.
11. Estimated uncollectible accounts expense to be 1 percent of sales on account.
12. Recorded the accrued interest at December 31, 2012.
Required
a. Record the above transactions in general journal form.
b. Open T-accounts and record the beginning balances and the 2012 transactions.
c. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for 2012.
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