The following post-closing trial balance was drawn from the accounts of Millers Metal Co. (MMC) as of
Question:
The following post-closing trial balance was drawn from the accounts of Millers Metal Co. (MMC) as of December 31, 2011.
Transactions for 2012
1. MMC acquired an additional \(\$ 4,000\) cash from the issue of common stock.
2. MMC purchased \(\$ 80,000\) of inventory on account.
3. MMC sold inventory that cost \(\$ 76,000\) for \(\$ 128,000\). Sales were made on account.
4. The company wrote off \(\$ 800\) of uncollectible accounts.
5. On September 1, MMC loaned \(\$ 10,000\) to King Co. The note had a 9 percent interest rate and a one-year term.
6. MMC paid \(\$ 16,000\) cash for operating expenses.
7. The company collected \(\$ 133,200\) cash from accounts receivable.
8. A cash payment of \(\$ 68,000\) was paid on accounts payable.
9. The company paid a \(\$ 2,000\) cash dividend to the stockholders.
10. Accepted credit cards for sales amounting to \(\$ 4,000\). The cost of goods sold was \(\$ 2,500\). The credit card company charges a \(4 \%\) 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, 2012 (see item 5).
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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