Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 39

Preparing Financial Statements; Effects of Business Transactions
The balance sheet items of The Sweet Shop (arranged in alphabetical order) were as follows at the close of the business on September 30, 2015:

The transactions occurring during the first week of October were:

Instructions
a. Prepare a balance sheet at September 30, 2015. (You will need to compute the missing figure for Notes Payable.)
b. Prepare a balance sheet at October 6, 2015. Also prepare an income statement and a statement of cash flows for the period October 1-6, 2015. 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.