Ethan Allen Interiors Inc. is a leading interior design company and manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Ethan Allen’s recent annual financial statements for fiscal year ending on June 30. Dollar amounts are in thousands.

Assume that the following events occurred in the first quarter ended September 30 of the next fiscal year:
a. Issued 1,600 additional shares of stock for $1,020 in cash.
b. Purchased $3,400 in additional intangibles for cash.
c. Ordered $43,500 in wood and other raw materials for the manufacturing plants.
d. Sold equipment at its cost for $4,020 cash.
e. Purchased $2,980 in long-term investments for cash.
f. Purchased property, plant, and equipment; paid $1,830 in cash and signed additional long-term notes for $9,400.
g. Sold at cost other assets for $310 cash.
h. Declared $300 in dividends.

Required:
1. Create T-accounts for each of the accounts listed above, including a new account Dividends Payable. Enter the balances at June 30 as the beginning balances for the quarter (in thousands of dollars). The account Treasury Stock reduces stockholders’ equity; its balance is on the debit side of the T-account.
2. Record each of the transactions for the first quarter ended September 30 in the T-accounts (including referencing) and determine the ending balances.
3. Explain your response to event (c).
4. Prepare a trial balance at September 30.
5. Prepare a classified balance sheet at September 30.
6. Compute the current ratio for the quarter ended September 30. Round your answer to three decimal places. What does this suggest about Ethan Allen Interiors Inc.?

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Cash Accounts receivable Inventories Prepaid expenses and other current assets Property, plant, and equipment Intangible assets Long-term investments Other assets $ 20,824 14,247 162,389 18,830 245,246 45,128 2,108 1,579 Accounts payable Unearned revenue Accrued expenses payable Long-term debt (includes the current portion of $550) Other long-term liabilities Common stock ($0.01 par value) Additional paid-in capital Treasury stock Retained earnings $ 35,485 56,714 30,077 1,066 23,080 491 377,913 656,597 642,122