The following trial balance was prepared for Tile, Etc., Inc. onDecember 31, 2017, after the closing entries were posted:
| Account Title | |
| Cash | $ | 110,000 | |
| Accounts receivable | | 125,000 | |
| Allowance for doubtful accounts | $ | 18,000 | |
| Inventory | | 425,000 | |
| Accounts payable | | 95,000 | |
| Common stock | | 450,000 | |
| Retained earnings | | 97,000 | |
|
Tile, Etc. had the following transactions in 2018:
- Purchased merchandise on account for $580,000.
- Sold merchandise that cost $420,000 for $890,000 onaccount.
- Sold for $245,000 cash merchandise that had cost $160,000.
- Sold merchandise for $190,000 to credit card customers. Themerchandise had cost $96,000. The credit card company charges a 4percent fee.
- Collected $620,000 cash from accounts receivable.
- Paid $610,000 cash on accounts payable.
- Paid $145,000 cash for selling and administrativeexpenses.
- Collected cash for the full amount due from the credit cardcompany (see item 4).
- Loaned $60,000 to J. Parks. The note had an 8 percent interestrate and a one-year term to maturity.
- Wrote off $7,500 of accounts as uncollectible.
- Made the following adjusting entries:
(a) Recorded uncollectible accounts expense estimated at 1 percentof sales on account.
(b) Recorded seven months of accrued interest on the note atDecember 31, 2018 (see item 9).
Required
- Organize the transaction data in accounts under an accountingequation.
- Prepare an income statement, a statement of changes instockholders’ equity, a balance sheet, and a statement of cashflows for 2018.
