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. 2,500 Property and Equipment 4,000 Liabilities: Short-Term Notes Payable Short-Term Investments 3,500 Long-Term Notes Payable 3,700 1,800 Shareholders' Equity: Contributed Capital 1,150 Required: Retained Earnings 3,350 1. Using the data from these T-accounts, complete the accounting equation on January 1, 2020: Assets Liabilities Shareholders' Equity 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 $1,750 of the investments for $1,750 cash. c. Sold one-half of the property and equipment for $2,000 cash. d. Borrowed $3,500 from the bank and signed a note promising to pay the principal and interest at an annual rate of 5 percent in three years. e. Paid $650 in dividends to shareholders. Cash Beg. bal. 2,500 Beg. bal. End. bal. Beg. bal. Property and Equipment 4,000 End. bal. End. bal. Short-Term Investments 3,500 Short-Term Notes Payable 3,700 Beg. bal. End. bal. Contributed Capital 1,800 Beg. bal. 1,150 Beg. bal. Long-Term Notes Payable End. bal. Retained Earnings 3,350 Beg. bal. End. bal. + 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: Total Liabilities Liabilities Shareholders' Equity Total assets Total shareholders' equity Total liabilities and shareholders' equity