Answered>Order 7382

Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.

For notes to the financial statements and Management Analysis Memo, consider the following:

Peyton Approved uses the following accounting practices:

• Inventory: Periodic, LIFO for both baking and merchandise
• Baking supplies: $27,850 ending inventory
• Equipment: Straight line method used for equipment

Business Financing Information: Use this information to calculate interest rates and insurance information, and to assess their impact on the company’s financial obligations:

• 6% interest note payable was made on Jan 31, 2017, and is due Feb 1, 2019.
• 5-year loan was made on June 1, 2016. Terms are 7.5% annual rate, interest only until due date.
• Insurance: Annual policy covers 12 months, purchased in February, covering March 2017 to February 2018. No monthly adjustments have been made.