Bayer AG. with headquarters in Leverkusen. Germany, is an international research-based group of companies active in health care, agriculture, polymers, and chemicals. Popular products include Bayer aspirin. Alka-Seltzer. and One-A-Day vitamins. The following is Bayer's (simplified) balance sheet from a recent year.

Required: 1. Prepare a journal entry for each transaction. 2. Create T-accounts for each balance sheet account and include the December 31, 2000, balances.

Post each journal entry to the appropriate T-accounts. 3. Prepare a balance sheet from the T-account ending balances for Bayer at December 31, 2001.

based on these transactions. 4. Compute Bayer's financial leverage ratio for 2001. What does this suggest about the company?

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ASSETS BAYER AG Balance Sheet at December 31, 2000 (in millions of Euros) Current Assets Cash Receivables and other assets Inventories 704 9.308 6.095 16,107