Cole Corporation, a new corporation, took over the assets and liabilities of Delta Art on January 2, 2019. The assets and liabilities, after appropriate revaluation by Cole, are as follows (amounts in parentheses are credits; other amounts are debits):

Cash............................................................................$ 60,000
Accounts Receivable....................................................225,000
Allowance for Doubtful Accounts.................................(25,000)
Merchandise Inventory.................................................175,000
Accounts Payable........................................................(25,000)
Accrued Expenses Payable.........................................(10,000)

The corporation is authorized to issue 500,000 shares of $ 20 par-value common stock and 400,000 shares of $10 par-value preferred stock. The preferred stock bears a stated yearly dividend rate of $1 per share. The transactions that follow were entered into at the time the corporation was formed.

INSTRUCTIONS
1. Make general journal entries to record the transactions.
2. Prepare the opening balance sheet as of January 2, 2019, for Cole Corporation.

Analyze: What is the current ratio for the corporation at January 2, 2019?

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TRANSACTIONS The corporation issued 20,000 shares of common stock to James Cole for his equity in the sole proprietorship business, and the corporation took over Cole's assets and liabilities. Issued 3,000 shares of preferred stock at par to Harriet Cole, James's wife, for cash. Issued 2,000 shares of common stock to Carol Kennedy. She paid $40,000 in cash for the stock. Issued 3,000 shares of preferred stock to James Walker. He paid $30,000 in cash for the stock. DATE Jan. 2 2 2.