Massimo Company has been operating for one year (2019). You are a member of the management...
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Massimo Company has been operating for one year (2019). You are a member of the management team investigating expansion ideas, all of which will require borrowing funds from banks. At the start of 2020, Massimo's T-account balances were as follows: Assets: Cash 1,100 Short-Term Investments 2,100 | Liabilities: Short-Term Notes Payable Long-Term Notes Payable 2,300 400 Shareholders' Equity: Contributed Capital 1,010 Required: Retained Earnings 2,090 1. Using the data from these T-accounts, complete the accounting equation on January 1, 2020: Assets = Liabilities Shareholders' Equity + Property and Equipment 2,600 2. Enter in the T-accounts the following transactions that occurred in 2020: a. Paid one-half of the principal on the long-term note payable. b. Sold $1,050 of the investments for $1,050 cash. c. Sold one-half of the property and equipment for $1,300 cash. d. Borrowed $2,100 from the bank and signed a note promising to pay the principal and interest at an annual rate of 5 perce years. e. Paid $510 in dividends to shareholders. Cash Beg. bal. 1,100 End. bal. 1,100 Beg. bal. Property and Equipment 2,600 End. bal. 2,600 Long-Term Notes Payable Short-Term Investments Beg. bal. 2,100 End. bal. 2,100 Short-Term Notes Payable 2,300 Beg. bal. 2,300 End. bal. Contributed Capital 400 Bea hal 1010 Bea bal Cash Beg. bal. 1,100 Beg. bal. End. bal. Beg. bal. End. bal. 1,100 Property and Equipment 2,600 2,600 Long-Term Notes Payable End. bal. Short-Term Investments 2,100 2,100 Short-Term Notes Payable 2,300 Beg. bal. 2,300 End. bal. Contributed Capital 400 Beg. bal. 1,010 Beg. bal. 400 End. bal. Retained Earnings 2,090 Beg. bal. 2,090 End. bal. 1,010 End. bal. 3. Compute ending balances in the T-accounts to complete the statement of financial position on December 31, 2020: Assets Liabilities Shareholders' Equity 4. Using the ending balances in the T-accounts, prepare a classified statement of financial position at December 31, 2020, in good form. Assets Current assets: Total current assets MASSIMO COMPANY Statement of Financial Position As at December 31, 2020 Liabilities: Liabilities 0 Total Liabilities 0 Shareholders' Equity Total shareholders' equity 0 Total assets $ 0 Total liabilities and shareholders' equity $ 5. Calculate the current ratio at December 31, 2020. (Round the final answer to 2 decimal places.) Current ratio Massimo Company has been operating for one year (2019). You are a member of the management team investigating expansion ideas, all of which will require borrowing funds from banks. At the start of 2020, Massimo's T-account balances were as follows: Assets: Cash 1,100 Short-Term Investments 2,100 | Liabilities: Short-Term Notes Payable Long-Term Notes Payable 2,300 400 Shareholders' Equity: Contributed Capital 1,010 Required: Retained Earnings 2,090 1. Using the data from these T-accounts, complete the accounting equation on January 1, 2020: Assets = Liabilities Shareholders' Equity + Property and Equipment 2,600 2. Enter in the T-accounts the following transactions that occurred in 2020: a. Paid one-half of the principal on the long-term note payable. b. Sold $1,050 of the investments for $1,050 cash. c. Sold one-half of the property and equipment for $1,300 cash. d. Borrowed $2,100 from the bank and signed a note promising to pay the principal and interest at an annual rate of 5 perce years. e. Paid $510 in dividends to shareholders. Cash Beg. bal. 1,100 End. bal. 1,100 Beg. bal. Property and Equipment 2,600 End. bal. 2,600 Long-Term Notes Payable Short-Term Investments Beg. bal. 2,100 End. bal. 2,100 Short-Term Notes Payable 2,300 Beg. bal. 2,300 End. bal. Contributed Capital 400 Bea hal 1010 Bea bal Cash Beg. bal. 1,100 Beg. bal. End. bal. Beg. bal. End. bal. 1,100 Property and Equipment 2,600 2,600 Long-Term Notes Payable End. bal. Short-Term Investments 2,100 2,100 Short-Term Notes Payable 2,300 Beg. bal. 2,300 End. bal. Contributed Capital 400 Beg. bal. 1,010 Beg. bal. 400 End. bal. Retained Earnings 2,090 Beg. bal. 2,090 End. bal. 1,010 End. bal. 3. Compute ending balances in the T-accounts to complete the statement of financial position on December 31, 2020: Assets Liabilities Shareholders' Equity 4. Using the ending balances in the T-accounts, prepare a classified statement of financial position at December 31, 2020, in good form. Assets Current assets: Total current assets MASSIMO COMPANY Statement of Financial Position As at December 31, 2020 Liabilities: Liabilities 0 Total Liabilities 0 Shareholders' Equity Total shareholders' equity 0 Total assets $ 0 Total liabilities and shareholders' equity $ 5. Calculate the current ratio at December 31, 2020. (Round the final answer to 2 decimal places.) Current ratio
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