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QUESTION 2 The balance sheet items of 'All Things Maple' (arranged in alphabetical order) were as follows at the close of the business on September 30, 2023. Accounts Payable $6,800 Furniture and Fixtures $9,000 Accounts Receivable 5,000 Land 72,000 Building 80,000 Notes Payable ? Capital Stock 100,000 Retained Earnings 19,100 Cash 6,900 Supplies 3,000 Additional transactions occurring during the first week of October were as follows. - Oct. 3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct. 6 Furniture was purchased on account at a cost of $8,000, to be paid within 30 days. Supplies were purchased for $900 cash from a restaurant supply center that was going out of business. These supplies would have cost $2,000 if purchased under normal circumstances. Oct. 1-6 Revenues of $8,000 were earned and received in cash. Expenses required to earn the revenues of $3,200 were incurred and paid in cash. Instructions a. Prepare a balance sheet as at September 30, 2023. (Compute Notes Payable.) b. Prepare a balance sheet as at October 6, 2023. c. Also prepare an income statement and a statement of cash flows for the period October 1-6, 2023. In your statement of cash flows, treat the purchase of supplies and the payment of accounts payable as operating activities. d. Assume the notes payable do not come due for several years. Is 'All Things Maple' in a stronger financial position on September 30 or on October 6? Explain your answer.

QUESTION 2 The balance sheet items of 'All Things Maple' (arranged in alphabetical order) were as follows at the close of the business on September 30, 2023. Accounts Payable $6,800 Furniture and Fixtures $9,000 Accounts Receivable 5,000 Land 72,000 Building 80,000 Notes Payable ? Capital Stock 100,000 Retained Earnings 19,100 Cash 6,900 Supplies 3,000 Additional transactions occurring during the first week of October were as follows. - Oct. 3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct. 6 Furniture was purchased on account at a cost of $8,000, to be paid within 30 days. Supplies were purchased for $900 cash from a restaurant supply center that was going out of business. These supplies would have cost $2,000 if purchased under normal circumstances. Oct. 1-6 Revenues of $8,000 were earned and received in cash. Expenses required to earn the revenues of $3,200 were incurred and paid in cash. Instructions a. Prepare a balance sheet as at September 30, 2023. (Compute Notes Payable.) b. Prepare a balance sheet as at October 6, 2023. c. Also prepare an income statement and a statement of cash flows for the period October 1-6, 2023. In your statement of cash flows, treat the purchase of supplies and the payment of accounts payable as operating activities. d. Assume the notes payable do not come due for several years. Is 'All Things Maple' in a stronger financial position on September 30 or on October 6? Explain your answer.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 10SPB: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...
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QUESTION 2 The balance sheet items of 'All Things Maple' (arranged in alphabetical order) were as follows at the close of the business on September 30, 2023. Accounts Payable $6,800 Furniture and Fixtures $9,000 Accounts Receivable 5,000 Land 72,000 Building 80,000 Notes Payable ? Capital Stock 100,000 Retained Earnings 19,100 Cash 6,900 Supplies 3,000 Additional transactions occurring during the first week of October were as follows. - Oct. 3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct. 6 Furniture was purchased on account at a cost of $8,000, to be paid within 30 days. Supplies were purchased for $900 cash from a restaurant supply center that was going out of business. These supplies would have cost $2,000 if purchased under normal circumstances. Oct. 1-6 Revenues of $8,000 were earned and received in cash. Expenses required to earn the revenues of $3,200 were incurred and paid in cash. Instructions a. Prepare a balance sheet as at September 30, 2023. (Compute Notes Payable.) b. Prepare a balance sheet as at October 6, 2023. c. Also prepare an income statement and a statement of cash flows for the period October 1-6, 2023. In your statement of cash flows, treat the purchase of supplies and the payment of accounts payable as operating activities. d. Assume the notes payable do not come due for several years. Is 'All Things Maple' in a stronger financial position on September 30 or on October 6? Explain your answer.
Transcribed Image Text:QUESTION 2 The balance sheet items of 'All Things Maple' (arranged in alphabetical order) were as follows at the close of the business on September 30, 2023. Accounts Payable $6,800 Furniture and Fixtures $9,000 Accounts Receivable 5,000 Land 72,000 Building 80,000 Notes Payable ? Capital Stock 100,000 Retained Earnings 19,100 Cash 6,900 Supplies 3,000 Additional transactions occurring during the first week of October were as follows. - Oct. 3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct. 6 Furniture was purchased on account at a cost of $8,000, to be paid within 30 days. Supplies were purchased for $900 cash from a restaurant supply center that was going out of business. These supplies would have cost $2,000 if purchased under normal circumstances. Oct. 1-6 Revenues of $8,000 were earned and received in cash. Expenses required to earn the revenues of $3,200 were incurred and paid in cash. Instructions a. Prepare a balance sheet as at September 30, 2023. (Compute Notes Payable.) b. Prepare a balance sheet as at October 6, 2023. c. Also prepare an income statement and a statement of cash flows for the period October 1-6, 2023. In your statement of cash flows, treat the purchase of supplies and the payment of accounts payable as operating activities. d. Assume the notes payable do not come due for several years. Is 'All Things Maple' in a stronger financial position on September 30 or on October 6? Explain your answer.
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