Aida and Maria decided to start selling food and drinks on a street next to the university campus. Read the facts described below, and then answer the questions provided.

1. On September 1st, using all their savings (\($12,000)\) and a bank loan (\($8,000\), 9 percent per year), they bought a second-hand van (price \($10,000\), 60 percent paid in cash, the rest due in two months) and some inventory (soft drinks, bread, sausages, and the like) total value \($500\) .

2. On the same day, Aida took an old fridge from her place, which was installed in the van.

3. On September, Aida and Maria started selling to students. The business went well, and, at the end of the year, Aida and Maria had already sold \($18,000\) in food and drinks, all in cash payments.

4. On September 15 local taxes were paid (\($400).

5.On October 20 some maintenance expenses for the van were paid (\($200).

6. On November, Aida and Maria decided to pay back a quarter of the outstanding debt, since the business was already generating fresh cash.

7. On December 30, they bought an additional fridge for drinks (\($600\) cash).

8. Inventory at the end of the year was \($1,100\).

9. Total purchases of inventory (from September 1 included) totaled \($12,000\) and were made on account.

10. On December 31, only \($1,000\) had to be paid to the supplier and nothing to the former owner of the van.

11.On the same day, interest expenses were paid.

12. The van was expected to last three more years, with zero expected scrap value.

13. Corporate tax rate was 40 percent, taxes to be paid the following year.

a. Prepare the balance sheet for Aida and Maria’s firm as of September (right after fact #2).

b. Prepare the balance sheet as of December31.

c. Prepare the income statement for the quarter.

d. What conclusions can be reached from the financial statements you prepared?