Problem 3-6 Fred Klein started his own business recently. He began by depositing $5,000 of his own money (equity) in a business account. Once he'd done that his balance sheet was as follows: Liabilities and Assets Equity Cash $5,000 Equity $5,000 Total Assets $5,000 Total $5,000 During the next month, his first month of business, he completed the following transactions. (All payments were made with checks out of the bank account.) Purchased $2,000 worth of inventory, paying $1,500 down and owing the vendor the remainder Used $500 of the inventory in making product. Pald employees' wages on the last day of the month of $1,100. Sold all the product made in the first month on credit for $3,000 Paid rent of $1,050 a. Construct a balance sheet for Fred's business at the end of its first month. (Hint: Fred's business has only current assets, current liabilities, and an equity account. Calculate the ending balance in each of the current accounts from the information given. The ending equity account balance will be the difference between the current assets and liabilities at month end.) Enter all amounts as positive numbers ASSETS LIABILITIES Cash $ Payables $ Receivables Current Labtes Inventory Current Assets Equity 5 Total Assets Total Liabilities and Equity $ Previous Next Check My Work Lapore book C D. Construct Fred's income statement.Wine Fred's revenue is the credit al is costu/expenses consist of the inventory used in product sold plus the things other than Inventory for which he wrote checks. Ignore taxes.) Revenue Less Cost/Expense Wages $ Inventory Rent $ Net Income c. Construct Fred's statement of cash flows for the month (Hint: Fred's beginning balance sheet has only two accounts, ces and equity, each with a $5,000 balonce. All other accounts open with zero balances. Use a minus sign, to indicate any decreases in cash or cash outflows. If an amount zero, enter" STATEMENT OF CASH FLOWS $ Cash Flow From Operating Activities Net Income Depreciation Net changes in current accounts $ Cash Flow From Investing Activities Chad My Work ebook $ $ Cash Flow From Investing Activities Cash Flow From Financing Activities Net Cash Flow $ Becondition $ Beginning cash Net Cash Flow Ending Cain d. 1. Fred's business profitable in an accountry sence in a car how cance? The input in the box below will not be graced, but may be redened and cont dered by your instructor . Can the busness tall while making profit? How might that happen in the next month or so? The input in the box below will not be graced, but may be rewed and considered by your instructor Previous Next Check My Work