Higgins Company began operations last year. You are a member of the management team investigating expansion ideas that willrequire borrowing funds from banks. On January 1, the start of the current year, Higgins' T-account balances were as follows:

Assets: Cash Short-Term Investments Property and Equipment 5,600 3,500 3,400 Liabilities: Notes Payable (noncurrect) Notes Payable (current) 2,600 1,200 Retained Earnings Additional Paid-in Capital Common Stock 700 4,400 3,600 Required: 1. Using the data from these T-accounts, determine the amounts for the following on January 1 of the current year: 2. Prepare journal entries for transactions (a) through (e) for the current year. a. Borrowed $5,000 from a local bank, signing a note due in three years. b. Sold $2,500 of the investments for $2,500 cash. c. Sold one-half of the property and equipment for $1,700 in cash. d. Declared $1,200 in cash dividends to stockholders. e. Paid dividends to stockholders. 3. Enter the effects of the transactions in 2. above in the T-accounts 4. Prepare a trial balance at December 31. 5. Prepare a classified balance sheet at December 31 of the current year in good form 6. Other stockholders' equity items Calculate the current ratio at December 31 of the current year. If the industry average for the current ratio is 1.46 Next Required 1 Required 2 Required 5 Required 6 Required 3 Required 4 Enter the effects of the transactions in Requirement 2 in the T-accounts. Cash Short-term Investments Beg. Bal Beg. Bal (a) End. Bal End. Bal Notes Payable (current) Property & Equipment Beg. Bal Beg. Bal End. Bal End. Bal. Dividends Payable Notes Payable (noncurrent) Beg. Bal Beg. Bal