Instructions {3] Prepare the adjusting entry that should be recorded to fairly present the lone 3i] financial statements. {bi How would the adjusting entry change if the 5% tax was a VAT rather than a sales tax? 4-5 lChen Company has been operating for seyeral years, and on December 31. 2015. presented the following statement of financial position [amounts in thousands}. W STATEMENT UF FINANCIRL POSITION W Plant assets {net} ERRED!) Share capitalordinary raccoon Inyentory 55,001] Retained earnings soooo Receivables ?5,D Mortgage payable 14. Cash .l Accounts payable ?, ssaocoo 43ELUDU The net income for 21115 was EZEJJDU. Assume that total assets are the sa me in com and 2015. 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. lib] Debt to assets. {b1 Acidtest ratio. {d1 Return on assets. 4-1 Describe the nature, type, and valuation of current liabilities? 4-2 Indicate how to present and analyze liability-related information? 4-3 The following are selected 2015 transactions of Darby Corporation. Sept. 1 Purchased inventory from Orion Company on account for $50,000. Darby records purchases gross and uses a periodic inventory system. Oct. 1 Issued a $50,000, 12-month, 8% note to Orion in payment of account. Oct. 1 Borrowed $75,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $81,000 note. Instructions (a) Prepare journal entries for the selected transactions above. (b) Prepare adjusting entries at December 31. (c) Compute the total net liability to be reported on the December 31 statement of financial position for: (1) The interest-bearing note. (2) The zero-interest-bearing note. 4-4 During the month of June, Danielle's Boutique had cash sales of R$265,000 and credit sales of R$153,700, both of which include the 6% sales tax that must be remitted to the government by July 15. Instructions (a) Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements