13.1 (LO Current Liability Entries and Adustment red below are certain transactions of Shark Company. The company uses the periodic inventory system 1 On March 10, the company purchased goods from Bait Company for $12,000 subject to cash discount terms of 1/10, 1/30. c e and counts payable are recorded by the company at grow amounts. The invoice was paid on March 19. 2 On April 1, the company borrowed $172,000 from Omega National Bank by signing a $200,000 nero in en due two years from April 1. 1 On June 30, the company bought a fishing boat for $10,000 from Open Water Corporation, paying $6,000 in cash and sign Ing a two-year, 8% note for the balance of the purchase price 4 On September 8, the board of directors declared a $65,000 cash dividend that was payable on October 15 to stockholders of record on September 25. Instructions Make all the journal entries necessary to record the transactions above using appropriate dates! 6) Shark Company's year-end December 31. Auming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concering interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts 513.5B (LO 1) (Adjusting Entry for Sales Tax) During the month of June, Bench Co. had cash sales of $300,000 and credit sales of $180,000, both of which include the 8% sales tax that must be remitted to the state by July 15. Instructions Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements. (Ratio Computations and Discussion) Singleton Company has been operating for several years, and on December 31, 2020, presented the following balance sheet: SINGLETON COMPANY BALANCE SHEET DECEMBER 31, 2020 Cash Receivables Inventories Plant assets (net) $ 20,000 37 500 47,500 110,000 $215.000 Accounts payable Mortgage payable Common stock ($1 par) Retained earnings $ 40,000 20.00 75.000 30,000 $215.000 The net income for 2020 was $12,500. Assume that total assets are the same in 2019 and 2020. Instructions Compute each of the following ratios. For each of the four, indicate the manner in which it is computed and its significance as a tool in the analysis of the financial soundness of the company. (a) Current ratio. (c) Debt to total assets. (b) Acid-test ratio. (d) Rate of return on assets