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, Massimos T-account balances were as follows:

Assets:
Cash
1,600

Short-Term Investments
2,600

Property and Equipment
3,100

Liabilities:
Short-Term Notes Payable
	2,800

Long-Term Notes Payable
	900

Shareholders Equity:
Contributed Capital
	1,060

Retained Earnings
	2,540

Required:

1. Using the data from these T-accounts, complete the accounting equation on January 1, 2020:

2. Enter in the T-accounts the following transactions that occurred in 2020:

1. Paid one-half of the principal on the long-term note payable.
2. Sold $1,300 of the investments for $1,300 cash.
3. Sold one-half of the property and equipment for $1,550 cash.
4. Borrowed $2,600 from the bank and signed a note promising to pay the principal and interest at an annual rate of 5 percent in three years.
5. Paid $560 in dividends to shareholders.

3. Compute ending balances in the T-accounts to complete the statement of financial position on December 31, 2020:

4. Using the ending balances in the T-accounts, prepare a classified statement of financial position at December 31, 2020, in good form.

5. Calculate the current ratio at December 31, 2020. (Round the final answer to 2 decimal places.)