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Solutions to Practice Problems - Balance Sheet
Requirement 1:
Construct journal entries for each of the following hypothetical
transactions during the quarter. Also, indicate which of the following
balance sheet categories are affected by the transactions: current
assets (CA), non-current assets (NCA), current liabilities (CL), noncurrent liabilities (NCL), and shareholders equity (SE).
Example: Purchased $2,000 of short-term investments.
Short-term investments (CA) 2,000
Cash (CA)
2,000
1)
2)
3)
4)
6)
7)
8)
9)
October 2
,
2010
October 3
,
2009
$ 12,225
$ 11,889
56,981
51,228
$ 69,206
$ 63,117
$ 6,109
$ 5,616
2,350
1,206
2,541
2,112
11,000
8,934
10,130
11,495
2,630
6,104
1,819
5,444
Long-term assets
Current liabilities
Borrowings
Total Equity
39,342
35,425
$ 69,206
$ 63,117
Write a journal entry for each of the following transactions and state
how the transaction would affect Disneys current ratio and
Debt/Equity ratio. (Analyze each transaction independently.) All
numbers are in millions.
2) Borrow $1,000, to be repaid in two years, and purchase equipment
with the proceeds.
3) Borrow $1,000, to be repaid in six months, and purchase inventory
with the proceeds.