i want number 7 answr

It was almost maidnight on December 31, and Mary Jo Barnes was reflecting on her first year as owner and manager of The Ganden Spot, a small garden shop she had opened on January 1 in Charlottesville, Virginia She and her husband, Josh, had both worked in a large city in the northeastern United Stutes for the past 10 years and had deciked to rehocate to Charlotrewille ro establish a different lifestyle. Bamen had a degree in horticulture and wanted to devote her working days to something she enjoyed and was passionate about. So she decided to start her own business and opened a small retail garden shop selling plants, trees, shrubs, and flowers. Barnes recalled what a busy day she had on that first day in January: 1. She had met with her lawyer to incorporate the business, and she and Josh invested 560,000 in the company in exchange for shares of comman stock. They had contenslated borrowing the $60,000 from Barnes's parents but had decided instead to use some of the money they had saved ower the past 10 years. 2. She had met with a loan officer from National Bank and obtained a $40,000 loan. The koan was to be repaid in cyual peincipal payments over four years. The interest rate was 10%, and interest was payable at the end of each year when the principal payment was made. 3. After breaking for a quick lunch at the local sandwich shop, she had visited a local used car dealer and had purchased a truck for $12,000 cash. The truck appearcd to be in excellent condition, and Barnes expected she would be able to use it for five years. 4. Next, she had gone to a local hardware store to buy the necessary cquipment for ber business, paying $10,000 cash for equipment she also expected she would use for five years. She had loen incredibly busy that first year. The Garden Spot had engaged in so many activities that Barnes could hardly remember them all. Fortunatels, she had kept all receipts and had made good notes. As she looked theough them, she made a list of what had occurred during that year: 5. Purchases of inventory throughout the year had cost $260,000,5235,000 of which was paid in cash and $25,000 was purchased on account 6. Sales of 5400,000,$315,000 of which were cash sales and 585,000 of which were sales on account. The inventory sold had originally cost a total of $240,000 7. Operating expenses incurred (advertising, reat, utilities, Icgal, and payroll) were $140,000, all paid in cash. For the exclusive use of N. Bin seaidan, 2023. Page 2 UV 7159 8. Payment of $14,000 made to National Bank, $10,000 of which was for repayment of the loan principat and $4,000 of which was for payment of interest Barnes recalled that employees did work in December for which poyment of $5,000 would be included in their paycheeks during the first week of January. On December 31, Bames had paid $990 in estimated income taxes for the yeat, Barnes necded to prepare the financial statements for The Garden Spot for that first year. She wated a nice, tidy summary of its performance, and the financial stanements would offer that summary. But she also needod to provide a set of financial statements to National Bank, as she was required to do annually based on her loan agreernent. She needed to get busy. 7. Based on yout review of the financial statements, what is your assessment of The Garden Spot's performance during its first year of operations