Notes: • Word-process your solutions within this template. Copy and paste tables from Excel as needed.• Show all steps used in arriving…
Notes: • Word-process your solutions within this template. Copy and paste tables from Excel as needed. • Show all steps used in arriving at the final answers. Incomplete solutions will receive partial credit. Problem 1 For the following accounts, classify as a current asset (CA), noncurrent asset (NCA), current liability (CL), noncurrent liability (NCL), or stockholders’ equity (SE). Indicate whether each account usually has a debit or credit balance. Accounts Receivable Retained Earnings Taxes Payable Prepaid Expenses Contributed Capital Long-Term Investments Plant, Property, and Equipment Accounts Payable Short-Term Investments Long-Term Debt Problem 2 Suppose a company performs the following activities within a year. For each activity, perform transaction analysis and indicate the account, amount, and direction of the effect on the account equation. Use the following headings: Assets = Liabilities + Stockholders’ Equity The activities are shown below. (a) Purchased new equipment costing $20,000, paying $14,000 in cash and signing a note for the rest (b) Declared $11,000 in dividends to be paid the following year (c) Sold $2,312 in short-term investments for cash (d) Investors sold their own stock to other investors on the stock exchange for $121,000 (e) Issued $1,000 of additional common stock shares, and received cash from investors Problem 3 Shown below are several transactions for a corporation and what accounts are affected. Using the given dollar amounts, explain in words the transaction that took place. Use the transactions to create a balance sheet. (a) Cash = +$8,000, Contributed Capital = +$8,000 (b) Cash = +$42,000, Note payable (short-term) = + $42,000 (c) Cash = −$2,000, Equipment +$5,000, Note payable (short-term) = +$3,000 (d) Cash = −$6,000, Note receivable (short-term) = +6,000 (e) Cash = −$1,800, Supplies = +$1,800 Problem 4 Given below is the balance sheet for a company. Balance Sheet (Millions of Dollars) Assets Current Assets Cash $5,846 Short-term investments 518 Receivables and other assets 4,510 Inventories 607 Other 2,624 $14,105 Noncurrent Assets Property, plant, and equipment $1,594 Long-term investments 318 Other non-current assets 2,533 Total assets $18,550 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $5,816 Other short-term obligations 4,585 $10,401 Long-term Liabilities $5,159 Stockholders’ equity Contributed Capital $7,832 Retained Earnings 14,690 Other stockholders’ equity items −19,532 Total stockholders’ equity and liabilities $18,550 Assume the following transactions (in millions) during the remainder of the initial year. (a) Borrowed $20 from banks due in two years (b) Lent $170 to affiliates, who signed a six-month note (c) Purchased additional investments for $6,000 cash; one-third were long term and the rest were short-term (d) Purchased $1820 worth of property, plant, and equipment; paid $600 in cash and the remainder with additional long-term bank loans (e) Issued additional shares of stock for $400 in cash (f) Sold short-term investments costing $3,000 for $3,000 cash (g) Declared and paid $13 in dividends during Year 1 Prepare a journal entry for each transaction. Then create T-accounts for each balance sheet account and include the new transactions. Post each journey entry to the appropriate T-accounts. Finally, create an updated balance sheet. PS. I need this done by 4 pm tomorrow, if you do before that time I will pay more. PLZ help.
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