Required information (The following information applies to the questions displayed below.) Edward Allen Interiors Inc. is a leading manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Edward Allen's September 30, 2016, trial balance. Accounts Payable Accounts Receivable Cash Common Stock Equipment Inventory Notes Payable (long-term) Notes Payable (short-term) Prepaid Rent Retained Earnings Salaries and Wages Payable Software $ 116 15 110 25 300 146 160 3 27 329 25 60 Assume that the following events occurred in the following quarter. a. Paid $40 cash for additional inventory. b. Issued additional shares of common stock for $30 in cash. c. Purchased equipment for $140; paid $65 in cash and signed a note to pay the remaining $75 in two years. d. Signed a short-term note to borrow $12 cash. e. Conducted negotiations to purchase a sawmill, which is expected to cost $32. 4. Summarize the journal entry effects from part 3 using T-accounts. Use the September 30, 2016, ending balances as the beginning balances for the October-December 2016 quarter. Cash Accounts Receivable Beg. Bal Beg. Bal. End. Bal. End Bal Inventory Prepaid Rent Beg. Bal. Beg. Bal. End. Bal End. Bal Equipment Software Beg. Bal Beg. Bal End. Bal End. Bal Accounts Payable Salaries and Wages Payable Beg Bal Beg Bal. End. Bal End. Bal Notes Payable (short-term) Notes Payable (long-term) Beg Bal Beg Bal End. Bal End. Bal Common Stock Retained Earnings Beg. Bal Beg. Bal End. Bal End. Bal 6. Prepare a classified balance sheet at December 31, 2016. EDWARD ALLEN INTERIORS, INC. Balance Sheet (in millions of dollars) 0 $ 0 0 0 0 0 7-a. Use your response to part 6 to calculate Edward Allen's current ratio after the transactions listed in (a)-(e) (Round your answer to 2 decimal places.) Current ratio after the transactions (a)-(e) 7-b. Based on this calculation and the calculation in part 1, indicate whether the above transactions increase or decrease the company's ability to pay current liabilities Increase Decrease 8. As of December 31, 2016, has the financing for Edward Allen's investment in assets primarily come from liabilities or stockholders' equity? Multiple Choice Liabilities Stockholders' Equity