These financial statement items are for Barfield Corporation at year-end, July 31, 2014.Salaries and wages payable………. . $ 2,080Salaries and wages expense………. 57,500Supplies expense…………… 15,600Equipment………………. 18,500Accounts payable………….. 4,100Service revenue……………. 66,100Rent revenue…………….. 8,500Notes payable (due in 2017)………. 1,800Common stock……………. 16,000Cash……………….. 29,200Accounts receivable…………. 9,780Accumulated depreciation—equipment……. 6,000Dividends……………… 4,000Depreciation expense………….. 4,000Retained earnings (beginning of the year) ….. 34,000Instructions(a) Prepare an income statement and a retained earnings statement for the year. Barfield Corporation did not issue any new stock during the year.(b) Prepare a classified balance sheet at July 31.(c) Compute the current ratio and debt to assets ratio.(d) Suppose that you are the president of Crescent Equipment. Your sales manager has approached you with a proposal to sell $20,000 of equipment to Barfield. He would like to provide a loan to Barfield in the form of a 10%, 5-year note payable. Evaluate how this loan would change Barfield’s current ratio and debt to assets ratio, and discuss whether you would make the sale.View Solution:
These financial statement items are for Barfield Corporation at year end



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