Question

# The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as...

The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, 2017:

 Cash \$ 9,000 Accounts receivable 41,000 Allowance for doubtful accounts \$ 2,500 Inventory 78,000 Accounts payable 21,000 Common stock 50,000 Retained earnings 54,500

Transactions for 2018

1 Acquired an additional \$20,000 cash from the issue of common stock.

2 Purchased \$85,000 of inventory on account.

3 Sold inventory that cost \$91,000 for \$160,000. Sales were made on account.

4 The company wrote off \$900 of uncollectible accounts.

5 On September 1, LGS loaned \$18,000 to Eden Co. The note had an 8 percent interest rate and a one-year term.

6 Paid \$19,000 cash for operating expenses.

7 The company collected \$161,000 cash from accounts receivable.

8 A cash payment of \$92,000 was paid on accounts payable.

9 The company paid a \$5,000 cash dividend to the stockholders.

10 Uncollectible accounts are estimated to be 1 percent of sales on account.

11 Recorded the accrued interest at December 31, 2018 (see item 5).

 LITTLE GROCERY SUPPLIER (LGS) Accounting Equation for the Year 2018 Event Assets = Liabilities + Stockholders’ Equity Accounts Titles for Retained Earnings Cash + Accounts Receivable – Allowance + Merchandise Inventory + Notes Receivable + Interest Receivable = Accounts Payable + Common Stock + Retained Earnings Bal. + – + + + = + + 1. + – + + + = + + 2. + – + + + = + + 3a. + – + + + = + + 3b. + – + + + = + + 4. + – + + + = + + 5. + – + + + = + + 6. + – + + + = + + 7. + – + + + = + + 8. + – + + + = + + 9. + – + + + = + + 10. + – + + + = + + 11. + – + + + = + + Bal. + – + + + = + +

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