Bryant Company sells a wide range of goods through two retail stores operated in adjoining cities. Most
Question:
Bryant Company sells a wide range of goods through two retail stores operated in adjoining cities. Most purchases of goods for resale are on invoices. Occasionally, a short-term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during 2010:
a. Purchased merchandise on credit, $18,000 on January 10, 2010; the company uses a periodic inventory system.
b. Borrowed $45,000 cash on March 1, 2010, from City Bank and gave an interest-bearing note payable: face amount, $45,000, due at the end of six months, with an annual interest rate of 10 percent payable at maturity.
Required:
1. Describe the impact of each transaction on the balance sheet equation. Indicate the effects (e.g., cash + or -), using the following schedule:
Date Assets Liabilities Stockholders’ Equity
2. What amount of cash is paid on the maturity date of the note?
3. Discuss the impact of each transaction on Bryant’s cash flows.
4. Discuss the impact of each transaction on the current ratio.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
Req 1 Date Assets Liabilities Stockholders Equity Jan...View the full answer
