Problem 20.4A Issuing stock at par and no-par value and preparing a balance sheet. Q Objectives 206, 207, 20-10 Cold Corp., a new corporation, took over the assets and liabilities of Trey Cold on January 2, 20X1. The assets and liabilities, after appropriate revaluation by Cold, are as follows amounts in parentheses are credits; other amounts are debits): Cash $ 70,000 Accounts Receivable 215,000 Allowance for Doubtful Accounts (25,000) Merchandise Inventory 175,000 Accounts Payable (25,000) Accrued Expenses Payable (10,000) The corporation is authorized to issue 500,000 shares of $ 10 par-value common stock and 500,000 shares of $ 10 par-value preferred stock. The preferred stock bears a stated yearly dividend rate of $1 per share. The transactions that follow were entered into at the time the corporation was formed. INSTRUCTIONS 1. Make general journal entries to record the transactions. 2. Prepare the opening balance sheet as of January 2, 20X1, for Cold Corp. Page 737 DATE TRANSACTIONS Jan. 2 The corporation issued 40,000 shares of common stock to Trey Cold for his equity in the sole proprietorship business, and the 2 Issued 3,000 shares of preferred stock at par to Harriet Cold, Trey's wife, for cash. 2 Issued 4,000 shares of common stock to Carol Kennedy. She paid $40,000 in cash for the stock. 2 Issued 2,000 shares of preferred stock to James Walker. He paid $20,000 in cash for the stock. Analyze: What is the current ratio for the corporation at January 2, 20X1