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

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 Furniture was purchased on account at a cost of $8,000, to be paid within 30 days. Supplies were purchased for $900 cash from a restaurant supply center that was going out of business. These supplies would have cost $2,000 if purchased under normal circumstances.
Oct. 1-6 Revenues of $8,000 were earned and received in cash. Expenses required to earn the revenues of $3,200 were incurred and paid in cash.
Instructions
a. Prepare a balance sheet at September 30, current year. (You will need to compute the missing figure for Notes Payable.)
b. Prepare a balance sheet at October 6, current year. Also prepare an income statement and a statement of cash flows for the period October 1-6, current year. 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 Sweet Shop in a stronger financial position on September 30 or on October 6? Explain briefly.

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5000 Land 80,000 Notes Payable 100,000 Retalned Earnings 72,000 Building. . . 19,100 3,000 Cash . . . . 6,900 Suppliles