Problem 2.8A (Static) Preparing Financial Statements; Effects of Business Transactions (LO2-4, LO2-5, LO2-6)

The balance sheet items of The Soda Shop (arranged in alphabetical order) were as follows at the close of business on September 30, 2021.

Accounts payable	$	8,500		Furniture and Fixtures	$	20,000
Accounts receivable		1,250		Land		55,000
Building		45,500		Notes payable		?
Capital stock		50,000		Retained earnings		4,090
Cash		7,400		Supplies		3,440

The transactions occurring during the first week of October were as follows.

Oct.	3		Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.)
Oct.	6		More furniture was purchased on account at a cost of $18,000, to be paid within 30 days. Supplies were purchased for $1,000 cash from a restaurant supply center that was going out of business. These supplies would have cost $1,875 if purchased under normal circumstances.
Oct.	1-6		Revenues of $5,500 were earned and received in cash. Expenses required to earn the revenues of $4,000 were incurred and paid in cash.

Required:

a. Prepare a balance sheet at September 30, 2021. (You will need to compute the missing figure for Notes Payable.)

b-1. Prepare a balance sheet at October 6, 2021.

b-2. Prepare an income statement for the period October 16, 2021.

b-3. Prepare a statement of cash flows for the period October 16, 2021. In your statement of cash flows, treat the purchase of supplies and the payment of accounts payable as operating activities.

c. Assume the notes payable do not come due for several years. Is The Soda Shop in a stronger financial position on September 30 or on October 6?

Problem 2.8A (Static) Preparing Financial Statements; Effects of Business Transactions (L02-4, LO2-5, LO2-6) The balance sheet items of The Sode Shop (arranged in alphabetical order) were as follows at the close of business on September 30. 2021 Accounts payable Accounts receivable Building Capital stock Cash $ 8,500 1,250 45, 5ee se, ese 7.480 Furniture and Fixtures Land Notes payable Retained earnings Supplies $ 28,00 55,00 ? 4,690 3,440 The transactions occurring during the first week of October were as follows. Oct.3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct.6 More furniture was purchased on account at a cost of $18,02e, to be paid within 30 days. Supplies were purchased for $1.ee cash from a restaurant supply center that was going out of business. These supplies would have cost $1,875 if purchased under normal circumstances. Oct.1- Revenues of $5, see were carned and received in cash. Expenses required to earn the revenues of $4,ese were incurred and paid 6 in cash. Required: a. Prepare a balance sheet at September 30, 2021. (You will need to compute the missing figure for Notes Paysble.) b-1. Prepare a balance sheet at October 6, 2021. b-2. Prepare an income statement for the period October 1-6, 2021. b-3. Prepare a statement of cash flows for the period October 1-6, 2021. In your statement of cash flows, trest the purchase of supplies and the payment of accounts payable as operating activities. C. Assume the notes payable do not come due for several years. Is The Sods Shop in a stronger financial position on September 30 or a on October 6? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Reg B3 Reqc Prepare a balance sheet at September 30, 2021. (You will need to compute the missing figure for Notes Payable.) THE SODA SHOP Balance Sheet September 30, 2021 Llabilities & Owners' Equity Liabilities: ABeeta S Total liabilities Owners' equity S 0 Total Assets 0 Total Liabilities & Owners' Equity 0 ROGA Req B1 > Problem 2.8A (Static) Preparing Financial Statements; Effects of Business Transactions (L02-4, LO2-5, LO2-6) The balance sheet items of The Sode Shop (arranged in alphabetical order) were as follows at the close of business on September 30. 2021 Accounts payable Accounts receivable Building Capital stock Cash $ 8,500 1,250 45, 5ee se, ese 7.480 Furniture and Fixtures Land Notes payable Retained earnings Supplies $ 28,00 55,00 ? 4,690 3,440 The transactions occurring during the first week of October were as follows. Oct.3 Additional capital stock was sold for $30,000. The accounts payable were paid in full. (No payment was made on the notes payable.) Oct.6 More furniture was purchased on account at a cost of $18,02e, to be paid within 30 days. Supplies were purchased for $1.ee cash from a restaurant supply center that was going out of business. These supplies would have cost $1,875 if purchased under normal circumstances. Oct.1- Revenues of $5, see were carned and received in cash. Expenses required to earn the revenues of $4,ese were incurred and paid 6 in cash. Required: a. Prepare a balance sheet at September 30, 2021. (You will need to compute the missing figure for Notes Paysble.) b-1. Prepare a balance sheet at October 6, 2021. b-2. Prepare an income statement for the period October 1-6, 2021. b-3. Prepare a statement of cash flows for the period October 1-6, 2021. In your statement of cash flows, trest the purchase of supplies and the payment of accounts payable as operating activities. C. Assume the notes payable do not come due for several years. Is The Sods Shop in a stronger financial position on September 30 or a on October 6? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Reg B3 Reqc Prepare a balance sheet at September 30, 2021. (You will need to compute the missing figure for Notes Payable.) THE SODA SHOP Balance Sheet September 30, 2021 Llabilities & Owners' Equity Liabilities: ABeeta S Total liabilities Owners' equity S 0 Total Assets 0 Total Liabilities & Owners' Equity 0 ROGA Req B1 >