Part 1#
Using Be Prepared, Inc.'s adjusted trial balance and prior period's balance sheet, prepare the following Financial Report in good form using Microsoft Excel or Microsoft Word:
- Comparative Balance Sheet for the months of December 2014 and January 2015 (See page 722 in your textbook for guidance).
Part 2#
Use the Comparative Balance Sheet you prepared in Phase #2 and the following additional information to prepare the Statement of Cash Flows for the month of January 2015. Use the indirect method to prepare the operating activities section.
- Issued 10,000 new shares of common stock when the stock was selling on the market at an average price of $10 per share on the date of sale and the par value of the stock was 50 cents.
- Purchased land with a cost $200,000. A down payment was made in the amount of $100,000 cash and a 10% 5-year note payable was signed for the difference.
- Purchased additional store equipment for $20,000 paying cash.
- The $15,000 notes receivable was related to the sale of merchandise inventory to a credit customer this period. Hint: The increase in notes receivable should be reported as an addition to the operating activities section of the statement of cash flows.
- Issued bonds with a face amount of $150,000 at 97. Hint: The amortization of the bond discount in the amount of $450 should be reported as an addition to the operating activities section.
- Paid off the mortgage payable of $175,000.
- The company repurchased 20,000 shares of its common stock on the open market for $9 per share.
- The company reissued 10,000 of the treasury shares at a price of $18 per share.
- Issued 1,500 shares of preferred stock at $105 per share.
- Paid cash dividends of $35,000 to preferred and common stockholders.