The following balance sheet data are reported for BrownleeCatering at September 30, 2015
Accounts receivable ... $17,000
Notes payable ... $12,000
Equipment ... $34,000
Supplies Inventory ... $9,000
Accounts payable $24,000
Cash ... $10,000
Common Stock ... $27,500
Retained earnings ... ?
Assume that on October 1, 2015, only the two followingtransactions occurred:
October 1 - Purchased additional equipment costing $11,000 ,giving $3,000 cash and signing an $8,000 note payable
Declared and paid a cash dividend of $3,000
__________
a. Prepare Brownlee Catering’s balance sheet at September 30,2015
b. Prepare the company’s balance sheet at the close of thebusiness on October 1, 2015
c. Calculate Brownlee’s current and quick ratios on September 30and October 1 (assume notes payable are non current).
d. The October 1, 2015 transactions have decreased Brownlee’scurrent and quick ratios, reflecting a decline in liquidity.Identify two transactions that would increase the company’sliquidity