Reference no: EM131720537

Problem - Comprehensive accounting cycle problem

The following trial balance was prepared for Village Cycle Sales and Service on December 31, 2016, after closing entries were posted:

Account Title	Debit	Credit
Cash	$46,200
Accounts Receivable	21,300
Allowance for Doubtful Accounts		$1,350
Inventory	85,600
Accounts Payable		28,000
Common Stock		80,000
Retained Earnings		43,750
Totals	$153,100	$153,100

Village Cycle had the following transactions in 2017:

1. Purchased merchandise on account for $260,000.

2. Sold merchandise that cost $243,000 on account for $340,000.

3. Performed $80,000 of services for cash.

4. Sold merchandise for $60,000 to credit card customers. The merchandise cost $41,250. The credit card company charges a 5 percent fee.

5. Collected $348,000 cash from accounts receivable.

6. Paid $265,000 cash on accounts payable.

7. Paid $115,000 cash for selling and administrative expenses.

8. Collected cash for the full amount due from the credit card company (see item 4).

9. Loaned $50,000 to Lee Supply. The note had a 9 percent interest rate and a one-year term to maturity.

10. Wrote off $830 of accounts as uncollectible.

11. Made the following adjusting entries:

(a) Recorded three months' interest on the note at December 31, 2017 (see item 9).

(b) Estimated uncollectible accounts expense to be .5 percent of sales on account.

Required - Prepare general journal entries for these transactions: post the entries to T-accounts: and prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for 2017.