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Prepare journal entries for the 18 transactions.

Prepare a trial balance showing what the ending ledger balances would be after the 18 transactions.

Prepare an income statement for the year

Prepare a statement of stockholders equity for the year

Prepare a balance sheet at the end of the year 2018.

South Company

January 1, 2018,

Balance Sheet

Cash 118,000

Accounts receivable 70,000

Less: Allowance for doubtful accounts (4,000)

Supplies 7,000

Prepaid rent (for January, 2018) 5,000

Inventory (10,000 units @ $3 each) 30,000

Equipment 130,000

Less: Accumulated depreciation (20,000)

-----------------

Total assets 336,000

Accounts payable 20,000

Demand loan payable to bank 80,000

Long-term notes payable (6% interest, due in 2030) 100,000

Capital stock 10,000

Retained earnings 126,000

-------------------

336,000

Transactions or events during 2018:

The company collected 68,000 of the accounts receivable in cash.

The company paid the $50,000 of the demand loan payable to the bank. The company also recognized and paid $6,000 of interest expense on the demand loan during the year.

On July 1, the company bought a 12 month insurance policy for $2,400.

The company wrote off one $500 accounts receivable from B. Grey.

On Jan. 1, the company bought a truck for $40,000.

The company paid 19,000 of its accounts payable in cash.

The company bought 110,000 units of inventory for $3.10 each in cash.

During the year, the company paid rent in cash for the months of February through December, for a total of $55,000.

The company made the appropriate entry to recognize that the prepaid balance in rent as of the beginning of the year was for a month that was now over.

On Dec. 20, the company sold 100,000 units for $5.00 each. 85,000 were sold for cash, and 15,000 on account.[The company accounts for its inventory on the LIFO basis.]

The company decided to record bad debt expense of $5,000.

The company recorded depreciation on the equipment using the straight line method. The equipment is one year old. It had a cost of $130,000, salvage value of $30,000, and an expected useful life of 5 years.

The company recorded depreciation on the truck, using the straight line method, assuming it had a six year life, and salvage value of $6,000.

The company made the appropriate adjustment to reflect the fact the insurance policy only had six more months left of effectiveness.

The company accrued the interest that had been built up on the long-term notes. The money had been borrowed on December 31, 2017. No payments of interest or principal were due until some time in 2019.

During the year, the company paid salaries to its employees of $12,000 in cash.

At the end of the year, the company recognized that $2,000 of income tax expense had accrued, but had not yet been paid.

At the end of the year, the company paid its shareholders a dividend of $3,000.

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