the following trial balance was prepared for Tile, Etcetera, Incorporated, on December 31, Year 1, after the closing entries were posted.

Account Title	Debit	Credit
Cash	$155,000
Accounts receivable	134,000
Allowance for doubtful accounts		$22,500
Inventory	443,000
Accounts payable		104,000
Common stock		495,000
Retained earnings		110,500
Totals	$732,000	$732,000

Tile, Etcetera had the following transactions in Year 2:

1. Purchased merchandise on account for $625,000.
2. Sold merchandise that cost $465,000 for $980,000 on account.
3. Sold for $290,000 cash merchandise that had cost $178,000.
4. Sold merchandise for $235,000 to credit card customers. The merchandise had cost $114,000. The credit card company charges a 3 percent fee.
5. Collected $710,000 cash from accounts receivable.
6. Paid $655,000 cash on accounts payable.
7. Paid $154,000 cash for selling and administrative expenses.
8. Collected cash for the full amount due from the credit card company (see item 4).
9. Loaned $55,000 to J. Parks. The note had an 6 percent interest rate and a one-year term to maturity.
10. Wrote off $8,400 of accounts as uncollectible.
11. Made the following adjusting entries:

1. (a) Recorded uncollectible accounts expense estimated at 1 percent of sales on account.
2. (b) Recorded seven months of accrued interest on the note at December 31, Year 2 (see item 9).

Required

1. Prepare general journal entries for these transactions, and post the entries to T-accounts. Also, prepare an income statement, a statement of changes in stockholders equity, and a balance sheet for Year 2.