Sage Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below. 1. January cash receipts recorded in the December cash book totaled $55,400, of which $34,700 represents cash sales, and $20,700 represents collections on account for which cash discounts of $336 were given. 2. January cash disbursements recorded in the December check register liquidated accounts payable of $20,763 on which discounts of $235 were taken. 3. The ledger has not been closed for 2020. 4. The amount shown as inventory was determined by physical count on December 31, 2020. The company uses the periodic method of inventory. (a) Your answer is correct. Prepare any entries you consider necessary to correct Sage's accounts at December 31. (If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) lo. Date Account Titles and Explanation Debit Credit Dec. 31 Accounts Receivable 21036 Sales Revenue 34700 Cash 55400 Sales Discounts 336 Dec. 31 Cash 20528 Purchase Discounts 235 Accounts Payable 20763 To what extent was Sage Equipment Co. able to show a more favorable balance sheet at December 31 by holding its cash book open? (Compute working capital and the current ratio.) Assume that the balance sheet that was prepared by the company showed the following amounts: (Round ratios to 2 decimal places, e.g. 4.56.) Dr. Cr. Cash $41,560 Accounts receivable 45,990 Inventory 69,380 Accounts payable $43,210 Other current liabilities 12,892 Per Balance Sheet After Adjustment Working capital $ $ Current ratio to 1 to 1 (a) Prepare journal entries on the Marigold Company books to record all the events noted above under each of the following bases. (1) Sales and receivables are entered at gross selling price. Sales and receivables are entered at net of cash discounts. (2) (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Cr (1) June 12 (2)