Lee Delivery Company Inc. was organized at the beginning of 2017. The following transactions occurred during 2017 (the company's first year of operations) a. Received $41,500 cash from the organizers in exchange for shares in the new company. b. Purchased land for $16,300 and signed a one-year note (at a 6 percent annual interest rate). c. Bought two used delivery trucks for operating purposes at the start of the year at a cost of $10,600 each, paid $5,300 cash and signed a promissory note for the balance, payable over the next three years (at an annual interest rate of 7 percent). d. Sold one-fourth of the land for $4,075 to Birkins Moving, which promised to pay in six months. e. Paid $2,300 cash to a truck repair shop for a new motor for one of the trucks. (Hint: Increase the account you used to record the purchase of the trucks since the usefulness of the truck has been improved.) f Traded the other truck and $6,300 cash for a new one. The old truck's fair value is $10,600. g. Shareholder Jonah Lee paid $27,800 cash for a vacant lot (land) for his personal use. h. Collected the amount of the note due from Birkins Moving in (d) i. Paid one-third of the principal of the note due for the delivery trucks in (C). Required: 1. Post the above transactions into the appropriate T-accounts, beginning balances is $0 for all accounts. Cash Short-Term Note Receivable Beg. bal. Beg. bal. 4,075 4,075 d. g. 41,500 4,075 27,800 5,300 C. 2,300 e. 6,300 . End. bal. 59,475 End. bal. Land Equipment 0 Beg. bal. 0 Beg. bal. 16,300 4,075 d. End. bal. 12,225 End. bal. Short-Term Notes Payable Long-Term Notes Payable o Beg. bal. 0 Beg. bal. End. bal. End. bal. Contributed Capital 0 Beg. bal. 41,500 a. 41,500 End. bal. 2-a. Prepare a classified statement of financial position for Lee Delivery Company at the end of 2017. LEE DELIVERY COMPANY Statement of Financial Position As at December 31, 2017 Assets Liabilities Current assets: Cash Current liabilities: Short-term notes payable $ 59,475 Total current liabilities 59,475 Total liabilities 0 Total current assets Noncurrent assets: Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity Total assets $ 59,475 2-b. Compute the current ratio at that date. (Round the final answer to 2 decimal places.) Current ratio 3. At the end of the next two years, Lee Delivery Company reported the following amounts on its statements of financial position: Current assets Non-current assets December 31, 2018 $53,500 39,500 December 31, 2019 $ 48,500 74,500 Total assets Short-term notes payable Long-term notes payable 93,000 24,500 18,500 123,000 41,500 21,500 Total liabilities Shareholders' equity 43,000 50,000 63,000 60,000 3-a. Compute the company's current ratio for 2017, 2018, and 2019. (Round the final answers to 2 decimal places.) 2017 2018 2019 Current ratio 4. At the beginning of 2020, Lee Delivery Company applied to your bank for a $50,000 short-term loan to expand the business. The vice-president of the bank asked you to review the information and make a recommendation on lending the funds based solely on the results of the current ratio. What recommendation would you make to the bank's vice-president about lending the money to Lee Delivery Company? Should not extend loan O Should extend loan Lee Delivery Company Inc. was organized at the beginning of 2017. The following transactions occurred during 2017 (the company's first year of operations) a. Received $41,500 cash from the organizers in exchange for shares in the new company. b. Purchased land for $16,300 and signed a one-year note (at a 6 percent annual interest rate). c. Bought two used delivery trucks for operating purposes at the start of the year at a cost of $10,600 each, paid $5,300 cash and signed a promissory note for the balance, payable over the next three years (at an annual interest rate of 7 percent). d. Sold one-fourth of the land for $4,075 to Birkins Moving, which promised to pay in six months. e. Paid $2,300 cash to a truck repair shop for a new motor for one of the trucks. (Hint: Increase the account you used to record the purchase of the trucks since the usefulness of the truck has been improved.) f Traded the other truck and $6,300 cash for a new one. The old truck's fair value is $10,600. g. Shareholder Jonah Lee paid $27,800 cash for a vacant lot (land) for his personal use. h. Collected the amount of the note due from Birkins Moving in (d) i. Paid one-third of the principal of the note due for the delivery trucks in (C). Required: 1. Post the above transactions into the appropriate T-accounts, beginning balances is $0 for all accounts. Cash Short-Term Note Receivable Beg. bal. Beg. bal. 4,075 4,075 d. g. 41,500 4,075 27,800 5,300 C. 2,300 e. 6,300 . End. bal. 59,475 End. bal. Land Equipment 0 Beg. bal. 0 Beg. bal. 16,300 4,075 d. End. bal. 12,225 End. bal. Short-Term Notes Payable Long-Term Notes Payable o Beg. bal. 0 Beg. bal. End. bal. End. bal. Contributed Capital 0 Beg. bal. 41,500 a. 41,500 End. bal. 2-a. Prepare a classified statement of financial position for Lee Delivery Company at the end of 2017. LEE DELIVERY COMPANY Statement of Financial Position As at December 31, 2017 Assets Liabilities Current assets: Cash Current liabilities: Short-term notes payable $ 59,475 Total current liabilities 59,475 Total liabilities 0 Total current assets Noncurrent assets: Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity Total assets $ 59,475 2-b. Compute the current ratio at that date. (Round the final answer to 2 decimal places.) Current ratio 3. At the end of the next two years, Lee Delivery Company reported the following amounts on its statements of financial position: Current assets Non-current assets December 31, 2018 $53,500 39,500 December 31, 2019 $ 48,500 74,500 Total assets Short-term notes payable Long-term notes payable 93,000 24,500 18,500 123,000 41,500 21,500 Total liabilities Shareholders' equity 43,000 50,000 63,000 60,000 3-a. Compute the company's current ratio for 2017, 2018, and 2019. (Round the final answers to 2 decimal places.) 2017 2018 2019 Current ratio 4. At the beginning of 2020, Lee Delivery Company applied to your bank for a $50,000 short-term loan to expand the business. The vice-president of the bank asked you to review the information and make a recommendation on lending the funds based solely on the results of the current ratio. What recommendation would you make to the bank's vice-president about lending the money to Lee Delivery Company? Should not extend loan O Should extend loan