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P2-5 (Algo) Recording Transactions, Preparing Journal Entries, Posting to T-Accounts, Preparing the Balance Sheet, and Evaluating the Current Ratio LO2-2, 2-4, 2-5 Skip to question

P2-5 (Algo) Recording Transactions, Preparing Journal Entries, Posting to T-Accounts, Preparing the Balance Sheet, and Evaluating the Current Ratio LO2-2, 2-4, 2-5

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Orange Incorporated, headquartered in Cupertino, California, designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. The following is Orange's (simplified) balance sheet from a recent year (fiscal year ending on the last Saturday of September).

ORANGE INCORPORATED
CONSOLIDATED BALANCE SHEET
September 28, 2019
(dollars in millions)
ASSETS
Current assets:
Cash $13,964
Short-term investments 11,329
Accounts receivable 17,607
Inventories 2,126
Other current assets 24,051
Total current assets 69,077
Long-term investments 131,200
Property, plant, and equipment, net 20,789
Other noncurrent assets 12,624
Total assets $233,690
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable $30,439
Accrued expenses 18,603
Unearned revenue 8,563
Short-term debt 6,359
Total current liabilities 63,964
Long-term debt 29,224
Other noncurrent liabilities 28,082
Total liabilities 121,270
Stockholders equity:
Common stock ($0.00001 par value) 1
Additional paid-in capital 24,612
Retained earnings 87,807
Total stockholders equity 112,420
Total liabilities and shareholders' equity $233,690

Assume that the following transactions (in millions) occurred during the next fiscal year (ending on September 26, 2020):

Borrowed $18,289 from banks due in two years.

Purchased additional investments for $23,200 cash; one-fifth were long term and the rest were short term.

Purchased property, plant, and equipment; paid $9,594 in cash and signed a short-term note for $1,433.

Issued additional shares of common stock for $1,492 in cash; total par value was $1 and the rest was in excess of par value.

Sold short-term investments costing $19,030 for $19,030 cash.

Declared $11,148 in dividends to be paid at the beginning of the next fiscal year.

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