Required Homework i Higgins Company began operations last year. You are a member of the management team investigating expansion ideas that will require borrowing funds from banks. On January 1, the start of the current year, Higgins' T-account balances were as follows: Assets: Debit Liabilities: Notes Payable (current) Stockholders' Equity: Debit Credit Common Stock Credit 5,200 Short-Term Investments Debit 10,000 Credit Notes Payable (noncurrent) Additional Paid-in Capital Debit a. Borrowed $11,500 from a local bank, signing a note due in three years. b. Sold $9,000 of the Investments for $9,000 cash. c. Sold one-half of the property and equipment for $3,000 in cash. d. Declared $3,800 in cash dividends to stockholders. e. Paid dividends to stockholders. 3. Enter the effects of the transactions in Requirement 2 in the T-accounts. 4. Prepare a trial balance at December 31. 5. Prepare a classified balance sheet at December 31 of the current year. 6. Calculate the current ratio at December 31 of the current year. 3,800 Required: 1. Using the data from the T-accounts given, complete the accounting equation on January 1 of the current year. 2. Prepare journal entries for transactions (a) through (e) for the current year. Property and Equipment Debit

Higgins Company began operations last year. You are a member of the management team investigating expansion ldeas that will require borrowing funds from baniks. On January 1, the start of the current year, Higgins' T-account balances were as follows. Assets: Liabilities: Stockholders' Equity: Required: 1. Using the data from the T-accounts given, complete the accounting equation on January 1 of the current year. 2. Prepare journal entries for transactions (a) through (e) for the current year. a. Borrowed $11,500 from a local bank, signing a note due in three years. b. Sold $9.000 of the investments for $9,000 cash. c. Sold one-haif of the property and equipment for $3,000 in cash. d. Declared $3,800 in cash dividends to stockholders. e. Paid dividends to stockholders. 3. Enter the effects of the transactions in Requirement 2 in the T-accounts. 4. Prepare a trial balance at December 31 5. Prepare a classified balance sheet at December 31 of the current year: 6. Calculate the current ratio at December 31 of the current year