Ethan Allen Interiors. Inc., is a leading manufacturer and retailer of home furnishings in 310 retail stores in the United States and abroad. The following is adapted from Ethan Allen's June 30, 2000, annual financial report. Dollars are in thousands.

Assume that the following events occurred in the first quarter ended September 30, 2000:

a. Purchased S3.400 in additional intangibles for cash.

b. Sold equipment at its cost for $4,020 cash.

c. Purchased S2.980 in short-term investments for cash.

d. Issued additional shares of stock for $1,020 in cash.

e. Purchased property, plant, and equipment; paid SI.830 in cash and signed additional long-term notes for S9.400.
/. Sold at cost other assets for $310 cash.
g. Declared and paid $300 in dividends.
Required: 1. Create T-accounts for each of the accounts on the balance sheet; enter the balances at June 30, 2000. 2. Record each of the transactions for the first quarter ended September 30, 2000, in the T-accounts

(including referencing) and determine the ending balances. 3. Prepare a classified balance sheet at September 30, 2000. 4. Compute the financial leverage ratio for the quarter ended September 30, 2000. What does this suggest about Ethan Allen Interiors, Inc.?

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Cash and cash equivalents $ 14,024 Other assets $ 5,276 Short-term investments 0 Accounts payable 65,879 Accounts receivable 34,336 Accrued expenses payable 33,969 Inventories 159.006 Long-term debt (includes the Prepaid expenses and other current portion of $8,420) 17,907 current assets 28,421 Other long-term liabilities 35,307 Property, plant, and equipment 247,738 Contributed capital 144,668 Intangibles 54,770 Retained earnings 245,841