The post-closing trial balance of Anderson Company at December 31, 2011, is shown here.

During 2012, Anderson Company had the following transactions:
a. Inventory purchases were $80,000, all on credit (debit Inventory).
b. An additional $10,000 of capital stock was issued for cash.
c. Merchandise that cost $100,000 was sold for $180,000; $100,000 were credit sales and the balance were cash sales. (Debit Cost of Goods Sold and credit Inventory for sale of merchandise.)
d. The notes were paid, including $7,000 interest.
e. $105,000 was collected from customers.
f. $95,000 was paid to reduce accounts payable.
g. Salaries expense was $30,000, all paid in cash.
h. A $10,000 cash dividend was declared and paid.
Required:
1. Prepare journal entries to record each of the 2012 transactions.
2. Set up T-accounts with the proper balances at January 1, 2012, and post the journal entries to the T-accounts.
3. Prepare an income statement for the year ended December 31, 2012, and a balance sheet as of that date. Also prepare a statement of retained earnings.
4. Prepare the entries necessary to close the nominal accounts, including Dividends.
5. Post the closing entries to the ledger accounts [label (i) and (j)] and prepare a post-closing trial balance at December 31,2012.

Transcribed Image Text:

Anderson Company Post-Closing Trial Balance December 31, 2011 Debits Credits Cash... Accounts Receivable.. Inventory.. Land Accounts Payable Notes Payable.... Capital Stock. Retained Eamings S 15,000 20,000 30,000 150000 25,00 35,000 S125,000 30,000 S215,000 S215,000 Totals