The following after-closing trial balance was drawn from the accounts of Spruce Timber Co. as of December 31,2006.

Transactions for 2007 

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. Estimated uncollectible accounts expense to be 1 percent of sales on account.
11. Recorded the accrued interest at December 31, 2007.

Required:

a. Organize the transaction data in accounts under an accounting equation.

b. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2007.

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Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Accounts Payable Common Stock Retained Earnings Totals Debit Credit $ 6,000 18,000 $ 2,000 24,000 9,200 20,000 16,800 $48,000 $48,000