Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 . The balance sheet items for Franklin Bakery (Arranged in Alphabetical order) were as follows at August 1, 2015. (you are to compute the

1. The balance sheet items for Franklin Bakery (Arranged in Alphabetical order) were as follows at August 1, 2015. (you are to compute the missing figure for Retained Earnings.)

Accounts payable

$16,200.00

Equipment and Fixtures

$44,500.00

Accounts Receivables

$11,260.00

Land

$67,000.00

Building

$84,000.00

Notes Payable

$74,900.00

Capital Stock

$80,000.00

Salaries Payable

$8,900.00

Cash

$6,940.00

Supplies

$7,000.00

During the next two days, the following transactions occurred:

Aug. 2 Additional capital stock was sold for $25,000. The accounts payable were paid in full. (No payment was made on notes payable or salaries payable)

Aug. 3 Equipment was purchased at a cost of $7,200 to be paid within 10 days. Supplies were purchased for $1,250 cash from a restaurant supply center that was going out of business. These supplies would have cost $1,890 if purchased through normal channels.

Instructions:

Prepare a balance sheet at August 1, 2015

Prepare a balance sheet at August 3, 2015, and a Statement of cash Flows for August 1 3. Classify the payment of account payable and the purchase of supplies as operating activities.

Assume the notes payable do not come due for several years, is Franklin Bakery in a stronger financial position on August 1 or on August 3? Explain briefly.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Internal Auditing An Operational Approach

Authors: Victor Zinn Brink

3rd Edition

0471065242, 978-0471065241

More Books

Students also viewed these Accounting questions

Question

Compare a delusion with a hallucination.

Answered: 1 week ago

Question

Does it exceed two pages in length?

Answered: 1 week ago

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago