The post closing trial balance of Anderson Company at December 31, 2002, is shown here.
|
Anderson Company Post Closing Trial Balance |
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|
31 Dec 02 |
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|
Cash |
Debits |
Credits |
|
Accounts Receivable. |
$15,000 |
|
|
Inventory |
20,000 |
|
|
Land.. |
30,000 |
|
|
Accounts Payable |
150,000 |
$25,000 |
|
Notes Payable |
35,000 |
|
|
Capital Stock |
125,000 |
|
|
Retained Earnings |
30,000 |
|
|
Totals |
$215,000 |
$215,000 |
During 2003, Anderson Company had the following transactions:
a. Inventory purchases were $80,000, all on credit (debit Inventory).
b. An additional $10,000 of capital stock was issued for cash.
c. Merchandise that cost $100,000 was sold for $180,000; $100,000 were credit sales and
the balance were cash sales. (Debit Cost of Goods Sold and credit Inventory for sale of merchandise.)
d. The notes were paid, including $7,000 interest.
e. $105,000 was collected from customers.
f. $95,000 was paid to reduce accounts payable.
g. Salaries expense was $30,000, all paid in cash.
h. A $10,000 cash dividend was declared and paid.
Required
1. Prepare journal entries to record each of the 2003 transactions.
2. Set up T accounts with the proper balances at January 1, 2003, and post the journal entries to the T accounts.
3. Prepare an income statement for the year ended December 31, 2003, and a balance sheet as of that date. Also prepare a statement of retained earnings.
4. Prepare the entries necessary to close the nominal accounts, including Dividends.
5. Post the closing entries to the ledger accounts [label (i) and (j)] and prepare a post closing trial balance at December 31, 2003.