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The following list of accounts was drawn for Tile, Etc., Inc. on December 31, Year 1, after the closing entries were posted: Tile, Etc. had
The following list of accounts was drawn for Tile, Etc., Inc. on December 31, Year 1, after the closing entries were posted: Tile, Etc. had the following transactions in Year 2: 1. Purchased merchandise on account for $580,000. 2. Sold merchandise that cost $420,000 for $890,000 on account. 3. Sold for $245,000 cash merchandise that had cost $160,000. 4. Sold merchandise for $190,000 to credit card customers. The merchandise had cost $96,000. The credit card company charges a 4 percent fee. 5. Collected $620,000 cash from accounts receivable. 6. Paid $610.000 cash on accounts payable. 7. Paid $145,000 cash for selling and administrative expenses. 8. Collected cash for the full amount due from the credit card company (see item 4). 9. Loaned $60,000 to J. Parks. The note had an 8 percent interest rate and a one-year term to maturity. 10. Wrote off $7.500 of accounts as uncollectible. 11. Made the following adjusting entries: (a) Recorded uncollectible accounts expense estimated at 1 percent of sales on account. (b) Recorded seven months of accrued interest on the note at December 31 , Year 2 (see item 9). Required with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell biank. Not all cells will require entry.) TILE, ETC., INC. Horizontal Statements Model Prepare an income statement for Year 2. (Do not round your intermediate calculation and round your final an nearest whole dollar.) Answer is not complete. Complete this question by entering your answers in the tabs below. Prepare a statement of changes in stockholders' equity for Year 2. (Do not round your intermediate calculation and round your final answer to the nearest whole dollar.) whole dollar. Be sure to list the assets in the order of their liquidity.) Prepare a statement of cash flows for Year 2. (Cash outflows should be indicated with a minus Based on the financial statements, write a paragraph evaluating the company's performance for the yeac. Comment on the profitability, cash flows and balance sheet strength
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