81 The balance sheet items for Collier Butcher Shop (arranged in alphabetical order) were as follows at July 1, current year. (You are to compute the missing figure for Retained Earnings.) ---- Accounts Payable.... Accounts Receivable Building Capital Stock Cash $ 8,400 9,840 108,000 120,000 4.920 Equipment and Fixtures Land Notes Payable Salaries Payable Supplies $30,000 60,000 48,000 4,440 8,400 During the next few days, the following transactions occurred. July 4 Additional capital stock was sold for $36,000. The accounts payable were paid in full. (No payment was made on the notes payable or salaries payable.) July 5 Equipment was purchased at a cost of $7,200 to be paid within 10 days. Supplies were purchased for $1.200 cash from a restaurant supply center that was going out of busi- ness. These supplies would have cost $2,400 if purchased through normal channels. Instructions a. Prepare a balance sheet at July 1, current year. b. Prepare a balance sheet at July 5, current year, and a statement of cash flows for July 1-5. Classify the payment of accounts payable and the purchase of supplies as operating activities. Assume the notes payable do not come due for several years. Is Collier Butcher Shop in a stronger financial position on July 1 or on July 5? Explain briefly. C