PB2-3 Recording Transactions (in a Journal and T-Accounts); Preparing and Interpreting the Balance Sheet [LO 2-2, LO 2-3, LO 2-4, LO 2-5] [The following information applies to the questions displayed below.] Starbeans is a coffee company-a big coffee company. During a 10-year period, the number of Starbeans locations grew from 165 to over 8,800 stores in 50 countries. The following is adapted from Starbeans's annual report for the year ended September 30, 2013, and dollars are reported in millions. Accounts Payable Accounts Receivable Cash Common Stock Equipment Intangible Assets Inventories Notes Payable (long-term) Prepaid Rent Retained Earnings Salaries and Wages Payable Short-Term Investments $6,320 645 3,410 520 5,260 3,700 1,960 2,510 655 4,990 2,120 830 Assume that the following events occurred in the following quarter, which ended December 31, 2013 Dollars are in millions. a. Paid $1,850 cash for additional intangible assets. b. Issued additional shares of common stock for $11,700 in cash. c. Purchased equipment; paid $3,600 in cash and signed additional long-term loans for $10,600. d. Paid $970 cash for salaries and wages owed at September 30. e. Conducted negotiations to purchase a coffee farm, which is expected to cost $9,600. References Section Break PB2-3 Recording Transactions in a Journal and T- Accounts); Preparing and Interpreting the Balance Sheet[LO 2-2, LO 2-3, LO 2-4, LO 2-5] 6. value: 1.00 points Required information PB2-3 Part 1 Required: 1. Analyze transactions (a)-(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Assets Liabilities Stockholders' Equity References eBook & Resources Accounting Learning Equation Objective: 02- 02 Apply transaction analysis to accounting transactions. Learning Objective: 02-05 Interpret the balance sheet using the current ratio and an understanding of related concepts. PB2-3 Part Learning Objective: 02- 03 Use journal entries and T- accounts to show how transactions affect the balance sheet. Difficulty: 3 Learning Hard Objective: 02- 04 Prepare a trial balance and a classified balance sheet. Check my work 7. value: 1.00 points Required information PB2-3 Part 2 2. Record the transaction effects determined in part 1 using journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet - 3 4 5 Paid $1,850 cash for additional intangible assets. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry View general journal Clear entry 9. value: 1.00 points Required information PB2-3 Part 5 5. Prepare a classified balance sheet at December 31, 2013. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) STARBEANS Balance Sheet (in millions of dollars) $ 10. value: 1.00 points Required information PB2-3 Part 7 7. Calculate Starbeans' current ratio at September 30, 2013, prior to the a. transactions listed above. (Using the September 30 balances will prevent any errors in your answers to requirements 1-5 from affecting your answer to this requirement.) (Round your answer to 2 decimal places.) Current Ratio 7. Based on the above calculation and analysis of Apple's current ratio 1.68, b. indicate which company was in a better position to pay liabilities. Apple Inc. Starbeans References eBook & Resources Worksheet Learning Objective: 02- 02 Apply transaction analysis to accounting transactions Learning Objective: 02-05 Interpret the balance sheet using the current ratio and an understanding of related concepts. PB2-3 Part Learning Objective: 02- 03 Use journal entries and T- accounts to show how transactions affect the balance sheet Difficulty: 3 Learning Hard Objective: 02- 04 Prepare a trial balance and a classified balance sheet Check my work
