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Exercise 7-15B Comprehensive single-arcle problem The following trial balance was drawn from the accounts of Southern Timber Co. as of December 31 . Year 1: Transactions for Year 2 1. Acquired an additional $20,000 cash from the issue of common stock. 2. Purchased $80,000 of inventory on account. 3. Sold inventory that cost $61,000 for $98,000. Sales were made on account. 4. Wrote off $1,500 of uncollectible accounts. 5. On September 1. Southern loaned $10,000 to Pine Co. The note had a 6 percent interest rate and a one-year term. 6. Paid $24.500 cash for salaries expense. 7. Collected $99,000 cash from accounts receivable. 8. Paid $78,000 cash on accounts payable. 9. Paid a $5,000 cash dividend to the stockholders. 10. Accepted credit cards for sales amounting to $5,000. The cost of goods sold was $3,500. The credit card company charges a 4 percent service charge. The cash has not been received. 11. Estimated uncollectible accounts expense to be 1 percent of sales on account. 12. Recorded the accrued interest at December 31 , Year 1 . 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 Year 2 . a. b. Southern Timber Co. Financial Statements For the Year Ended December 31, Year 2 Income Statement Southern Timber Co. Balance Sheet As of December 31, Year 2 Assets: Cash Accounts Receivable Less: Total Assets Liabilities: Total Liabilities Stockholders' Equity: Total Stockholders' Equity Total Liabilities and Stockholders' Equity $87,020 Southern Timber Co. Statement of Cash Flows For the Year Ended December 31, Year 2 Cash Flows From Operating Activities: Net Cash Flow from Operating Activities Cash Flows From Investing Activities: Net Cash Flow from Investing Activities Cash Flows From Financing Activities: Net Cash Flow from Financing Activities Net Change in Cash Plus: Ending Cash Balance

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