The following list of accounts was drawn for Tile, Etc., Incorporated on December 31, Year 1, after the closing entries were posted:

Account Title
Cash	$110,000
Accounts receivable	125,000
Allowance for doubtful accounts	18,000
Inventory	425,000
Accounts payable	95,000
Common stock	450,000
Retained earnings	97,000

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).

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{17}{|c|}{ TILE, ETC., INCORPORATED } \\ \hline \multicolumn{17}{|c|}{ Accounting Equation for Year 2} \\ \hline \multirow[b]{2}{*}{ Event } & \multicolumn{9}{|c|}{ Assets } & \multirow{2}{*}{=} & \multirow{2}{*}{LiabilitiesAccountsPayable} & \multirow[b]{2}{*}{+} & \multicolumn{3}{|c|}{ Stockholders' Equity } & \multirow[b]{2}{*}{AccountTitlesforRetainedEarnings} \\ \hline & Cash & + & NetRealizableValueofAccountsReceivable & + & MerchandiseInventory & + & NotesReceivable & + & InterestReceivable & & & & CommonStock & = & RetainedEarnings & \\ \hline Balance & 175,000 & + & 13800024500 & + & & + & & + & & = & & + & & = & & \\ \hline 1. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 2a. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 2b. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 3a. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 3b. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 4a. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 4a. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 4b. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 5. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 6. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 7. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 8. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 9. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 10. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 11a. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline 11b. & & + & & + & & + & & + & & = & & + & & = & & \\ \hline Balance & 175,000 & + & 0 & + & 0 & + & 0 & + & 0 & = & 0 & + & 0 & = & 0 & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ TILE, ETC., INCORPORATED } \\ \hline \multicolumn{2}{|c|}{ Financial Statements } & \\ \hline & For the Year Ended December 31, Year 2 \\ \hline & & \\ \hline Operating expenses & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total operating expenses & & \\ \hline & & \\ \hline Add: Non-operating items & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ TILE, ETC., INCORPORATED } \\ \hline \multicolumn{2}{|c|}{ Statement of Changes in Stockholders' Equity } \\ \hline For the Year Ended December 31, Year 2 \\ \hline & & \\ \hline Ending common stock & & \\ \hline Beginning retained earnings & & $ \\ \hline & & \\ \hline Ending retained earnings & & \\ \hline Total stockholders' equity & & $ \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ TILE, ETC., INCORPORATED } \\ \hline \multicolumn{2}{|c|}{ Statement of Cash Flows } \\ \hline Cash flows from operating activities: & & \\ \hline Outflow for notes receivable & $(102,500) & \\ \hline & & \\ \hline & & \\ \hline Net cash flow from operating activities & & $(102,500) \\ \hline Cash flows from investing activities: & & \\ \hline & & \\ \hline & & \\ \hline Net cash flow from investing activities & & \\ \hline Cash flows from financing activities & & (102,500) \\ \hline Net change in cash & & \\ \hline & & $(102,500) \\ \hline Ending cash balance & & \\ \hline \end{tabular} 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). \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ TILE, ETC., INCORPORATED } \\ \hline \multicolumn{1}{|c|}{ As of December 31, Year 2 } \\ \hline Assets & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total assets & & \\ \hline Liabilities & & \\ \hline & & \\ \hline & & \\ \hline Total liabilities & & \\ \hline Stockholders' equity & & \\ \hline & & \\ \hline \end{tabular}